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Funds Beginner: Introduction to Mutual Funds

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1.
Which of the following is not a method of buying mutual fund shares?
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All of the above are valid methods. All the methods named are valid ways to buy mutual fund shares.
2.
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.
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.
The total return of a mutual fund includes dividends.
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True. Total return includes both dividends and increases in share value.
5.
Mutual fund management expenses are covered by fees.
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True. Management costs are included in the 12b-1 fees.
6.
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."
7.
Stock mutual funds are oriented toward _______.
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Growth. Because stocks have growth potential, stock funds include them.
8.
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.