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Funds 108: Introduction to Mutual Fund Prospectuses

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1.
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.
2.
If you want to read about your options for mutual fund investment plans, you can find them in the shareholder manual.
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True. Investment plans are part of a shareholder's privileges.
3.
A mutual fund objective may include a statement of the level of income it seeks.
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True. This is one of the most important parts of the objective.
4.
The mutual fund advisor may play additional roles besides that of advisor.
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True. It may also be the transfer agent.
5.
Transaction fees cover buying and selling costs of securities within a mutual fund.
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True. Transacting is essentially buying and selling portfolio securities.
6.
A mutual fund prospectus does all of the following except _______.
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Make recommendations. Prospectuses are forbidden to advertise a fund.