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1.
Buying a mutual fund that has a very low turnover rate will reduce the number of _______.
Choose wisely. There is only one correct answer.
Capital gains. A lot of turnover will likely result in a lot of capital gains, which are normally taxable. If you want to reduce taxes, consider low-turnover funds.
2.
Income from municipal bond mutual funds may be taxable on the state level.
Choose wisely. There is only one correct answer.
True. In some cases, they are taxable on the state level.
3.
The _______ is what you earn when you sell mutual fund shares at a profit.
Choose wisely. There is only one correct answer.
Capital gain. The other two are earned when the fund, not you, makes a profit.
4.
An exchange of shares from one mutual fund to another in a fund family is a taxable event, except in the case of _______.
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Qualified retirement plans. Exchanges made within qualified retirement plans are tax-exempt.
5.
Which IRS form reports withdrawals from retirement plans?
Choose wisely. There is only one correct answer.
1099-R. This form reports retirement plan withdrawals.