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Funds Beginner: Introduction to Mutual Funds

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1.
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.
2.
_______ are the earnings on a mutual fund's holdings that are distributed to shareholders.
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Dividends. Dividends are shareholders' shares of earnings.
3.
To identify the securities in which a mutual fund invests, you can read its _______.
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Prospectus. This is the only of the above choices that lists a money market fund's holdings.
4.
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.
5.
A mutual fund is a(n) _______.
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Package of several types of securities. Although some mutual funds invest only in stocks or bonds, mutual funds as a whole are open to several types of securities.
6.
Stock mutual funds mostly buy _______ stocks.
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Common. Common stocks provide the growth that stock funds seek.
7.
Mutual fund management expenses are covered by fees.
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True. Management costs are included in the 12b-1 fees.
8.
Which of the following is not a hybrid fund?
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A stock fund. Stock funds invest in a particular type of security (stocks), whereas hybrid funds are based on particular investment objectives.