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Funds Beginner: Introduction to Mutual Funds

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1.
In what do money market funds invest?
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Short-term debts. The money market is composed of short-term debts and nothing else.
2.
When a mutual funds individual holdings make money, so do the mutual funds shareholders.
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True. Earnings are passed from the holdings to the funds shareholders.
3.
Stock mutual funds are oriented toward _______.
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Growth. Because stocks have growth potential, stock funds include them.
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.
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.
6.
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.
7.
The total return of a mutual fund includes dividends.
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True. Total return includes both dividends and increases in share value.
8.
Mutual fund management expenses are covered by fees.
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True. Management costs are included in the 12b-1 fees.