Funds Beginner: Introduction to Mutual Funds

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1.
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.
2.
What do hybrid mutual funds strive to achieve?
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A particular investment objective. Hybrid funds are defined by their objectives, and their names often reflect this. The other choices are only examples of hybrid funds.
3.
Mutual fund management expenses are covered by fees.
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True. Management costs are included in the 12b-1 fees.
4.
You can buy mutual fund shares directly from the mutual fund company.
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True. You can buy shares directly. This is one of the popular features of mutual funds.
5.
Stock mutual funds are oriented toward _______.
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Growth. Because stocks have growth potential, stock funds include them.
6.
The total return of a mutual fund includes dividends.
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True. Total return includes both dividends and increases in share value.
7.
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.
8.
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.