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Stocks 502: Unconventional Equities

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1.
The prices of MLP units often change in conjunction with changes in _______.
Choose wisely. There is only one correct answer.
Interest rates. Since MLP cash distributions are so steady, many investors treat them like bonds. Thus, when interest rates rise, bond and MLP prices tend to fall. This relationship is not perfect, but it generally holds over time.
2.
Real estate investment trusts must distribute _______ of their taxable income to shareholders each year as dividends.
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At least 90%. By law, they must distribute at least 90%.
3.
What will eventually happen to the distributions that royalty trusts pay their investors?
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They will disappear. Resources are finite; therefore, they will run out eventually.
4.
If you are a mutual fund investor, you can invest in master limited partnerships.
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True. The government recently gave mutual funds the green light to invest in MLPs.
5.
Royalty trusts invest mostly in assets in what sector?
Choose wisely. There is only one correct answer.
Energy. Royalty trusts invest mostly in energy, which can yield high returns at times, but which are also volatile.