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Funds 108: Introduction to Mutual Fund Prospectuses

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1.
A mutual fund prospectus does all of the following except _______.
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Make recommendations. Prospectuses are forbidden to advertise a fund.
2.
The mutual fund shareholder manual explains how to open a mutual fund account.
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True. That is one of its most basic services.
3.
Which of the following is not a transaction fee?
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Management fee. This fee is an operating expense. It is not related to trading.
4.
The mutual fund prospectus explains the risk of the mutual fund.
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False. It explains the risks of the types of securities it holds, but it does not cover risks of the fund itself.
5.
An objective may include a statement of the level of share-price stability it seeks.
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True. Stability is often a strategy for achieving an objective.
6.
The mutual fund advisor may play additional roles besides that of advisor.
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True. It may also be the transfer agent.