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Funds Intermediate: Balanced Mutual Funds

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1.
An asset allocation mutual fund can be more volatile than a balanced fund.
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True. Asset allocation funds can be more volatile than balanced funds, depending upon their asset mix and investment objectives.
2.
One of the goals of a balanced mutual fund is to ________.
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Conserve principal. Balanced funds are fairly conservative. They do not have rapid growth or tax savings as goals.
3.
Which of the following can help you evaluate the performance of a balanced mutual fund?
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All of the above. Turnover, total return, and current asset holdings can all be used to judge a balanced funds performance.
4.
Balanced mutual funds establish guidelines as to how much they can invest in each asset class.
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True. Balanced mutual funds establish guidelines as to how much of the fund can be invested in each asset.
5.
To evaluate a balanced mutual fund, it is best to compare its total return with _______.
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Total returns of similar balanced funds. Compare the funds total return to those of other funds with similar investment strategies.