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Funds 502: Fund Warning Signs

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1.
A funds asset growth can lead to many changes. Which of the following is often one of them?
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All of the above. All of these are possible effects of asset growth.
2.
A funds performance can be affected when new funds are added to the family it belongs to.
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True. Sometimes, a fund will lose its focus or change its role within the fund.
3.
Which of the following is not a good way to find out if your fund is on the verge of change?
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Keep an eye on your funds performance only. Fund performance isnt everything; it wont reflect a manager change, for example, or clue you in to changes that may be on the horizon.
4.
Which type of fund is least likely to be affected by a change in management?
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An index fund. Index funds mimic indexes; no matter who is managing, the selection of stocks will be according to that benchmark.
5.
As a mutual fund family grows, its funds will continue to perform their original roles.
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False. Sometimes a fund changes its focus, for example from small-cap to mid-cap.