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Funds Intermediate:
Balanced Mutual Funds
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1.
Balanced mutual funds have higher returns than equity mutual funds when the stock market rises.
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True
False
False. Balanced mutual funds do not usually offer as high a return as equity funds, whether or not the market rises.
2.
Which of the following can help you evaluate the performance of a balanced mutual fund?
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Turnover
Total return
Current asset holdings
All of the above
All of the above. Turnover, total return, and current asset holdings can all be used to judge a balanced funds performance.
3.
To evaluate a balanced mutual fund, it is best to compare its total return with _______.
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Interest rates
Total returns of similar balanced funds
Brokerage performance
Total returns of similar balanced funds. Compare the funds total return to those of other funds with similar investment strategies.
4.
The "balance" in a balanced mutual fund usually means ________.
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High-tax assets are balanced with low-tax assets
Assets that grow are mixed with assets that generate income
Assets are picked by qualified fund managers
Assets that grow are mixed with assets that generate income. With this approach, balanced funds minimize the losses of high-volatility assets.
5.
Balanced mutual funds establish guidelines as to how much they can invest in each asset class.
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True
False
True. Balanced mutual funds establish guidelines as to how much of the fund can be invested in each asset.
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