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Funds Beginner: Introduction to Mutual Funds

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1.
What are bonds sold by states called?
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Municipal bonds. This is the accepted name for them. The term "government bonds" refers to bonds sold by the federal government.
2.
Mutual fund management expenses are covered by fees.
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True. Management costs are included in the 12b-1 fees.
3.
If you buy mutual fund shares from another investor instead of from the fund itself, you are buying _______ shares.
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Closed-end. Closed-end fund shares are traded between investors and cannot be bought from the fund itself, except when it sells shares for the very first time.
4.
You can buy mutual fund shares directly from the mutual fund company.
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True. You can buy shares directly. This is one of the popular features of mutual funds.
5.
Stock mutual funds are oriented toward _______.
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Growth. Because stocks have growth potential, stock funds include them.
6.
What are a security's increases in value called after they are sold?
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Capital gains. They are capital gains after they are sold, but paper profit while they are still held.
7.
What do hybrid mutual funds strive to achieve?
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A particular investment objective. Hybrid funds are defined by their objectives, and their names often reflect this. The other choices are only examples of hybrid funds.
8.
Money market mutual funds invest in all but which of the following?
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Stocks. Money market funds invest in debts, and stocks are not debts.