Funds Beginner: Introduction to Mutual Funds

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1.
Mutual fund management expenses are covered by fees.
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True. Management costs are included in the 12b-1 fees.
2.
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.
3.
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.
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.
Stock mutual funds mostly buy _______ stocks.
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Common. Common stocks provide the growth that stock funds seek.
6.
_______ 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.
7.
_______ invest in the debts of private companies.
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Corporate bond funds. Corporate bonds are issued by private companies.
8.
To identify the securities in which a mutual fund invests, you can read its _______.
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Prospectus. This is the only of the above choices that lists a money market fund's holdings.