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1.
Growth mutual funds pay few or no dividends because the companies they invest in usually reinvest their profits for more growth.
True. Reinvesting profits adds to a companys capitalization.
2.
Large-cap companies are popular choices for growth mutual funds.
False. Although they may be included, they are not as frequently chosen as small-caps and mid-caps are. These latter companies generally have more room to grow than large-caps do.
3.
The Acme Internet Enterprise Fund, which is an up-and-coming Internet mutual fund, is likely to be a sector fund.
True. According to its name, it invests in one area of the marketthe Internet.
4.
The performance of a growth mutual fund depends upon the _______ of the securities it contains.
Performance. A fund is only as good as the investments it contains.
5.
Stocks that sell below their worth are called _______ stocks.
Value. Stocks that managers believe are selling for less than they are worth are called value stocks.