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Funds 108: Introduction to Mutual Fund Prospectuses

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1.
Which of the following is an operating expense in a mutual fund?
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12b-1 fee. Taxes are not operating expenses, and the other two are transaction fees.
2.
A mutual fund prospectus does all of the following except _______.
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Make recommendations. Prospectuses are forbidden to advertise a fund.
3.
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.
4.
Which party hands out dividends to mutual fund investors?
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The transfer agent. If you chose "distributor," remember that this party distributes shares, not dividends.
5.
Which of the following is not covered under a prospectus' section on performance?
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Risks. The "Performance" section deals with objective data.
6.
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.