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.
Which of the following is not a type of mutual fund expense?
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Ownership fee. There are no fees just for owning mutual funds.
3.
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.
4.
Stock mutual funds mostly buy _______ stocks.
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Common. Common stocks provide the growth that stock funds seek.
5.
A mutual fund is a(n) _______.
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Package of several types of securities. Although some mutual funds invest only in stocks or bonds, mutual funds as a whole are open to several types of securities.
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.
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.
8.
_______ are the earnings on a mutual fund's holdings that are distributed to shareholders.
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Dividends. Dividends are shareholders' shares of earnings.