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Funds 108: Introduction to Mutual Fund Prospectuses

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1.
The mutual fund advisor may play additional roles besides that of advisor.
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True. It may also be the transfer agent.
2.
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.
3.
A mutual fund prospectus does all of the following except _______.
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Make recommendations. Prospectuses are forbidden to advertise a fund.
4.
What does the section on the fund's objectives tell the investor?
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All of the above. The "Objectives" section includes strategies, philosophy, and objectives.
5.
A mutual fund shareholder manual does all of the following except explain how _______.
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Taxes apply. The shareholder manual explains share price, redemption, and adding to your account.
6.
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.