Funds Beginner: Introduction to Mutual Funds

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1.
_______ 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.
2.
Money market mutual funds invest in all but which of the following?
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Stocks. Money market funds invest in debts, and stocks are not debts.
3.
Mutual fund management expenses are covered by fees.
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True. Management costs are included in the 12b-1 fees.
4.
Which of the following is not a hybrid fund?
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A stock fund. Stock funds invest in a particular type of security (stocks), whereas hybrid funds are based on particular investment objectives.
5.
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.
6.
Stock mutual funds mostly buy _______ stocks.
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Common. Common stocks provide the growth that stock funds seek.
7.
If you do not have the minimum amount needed to start investing in a mutual fund, it is still possible to invest in one.
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True. You may participate in an automatic investment plan until you reach the required minimum amount.
8.
When a mutual funds individual holdings make money, so do the mutual funds shareholders.
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True. Earnings are passed from the holdings to the funds shareholders.