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Funds Beginner: Introduction to Mutual Funds

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1.
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.
2.
Index mutual funds achieve their objectives by matching markets.
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True. An index fund buys the securities of a given index so that it can stay abreast of "the market."
3.
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.
4.
One reason bond mutual funds include bonds is for their _______.
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Income. Bonds provide their owners with current, steady income. That is one reason bond funds include them.
5.
If you do not have the minimum amount needed to start investing in a mutual fund, it is still possible to invest in one.
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True. You may participate in an automatic investment plan until you reach the required minimum amount.
6.
Which of the following is not a type of mutual fund expense?
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Ownership fee. There are no fees just for owning mutual funds.
7.
Stock mutual funds are oriented toward _______.
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Growth. Because stocks have growth potential, stock funds include them.
8.
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.