Funds Beginner: Introduction to Mutual Funds

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1.
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.
2.
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.
3.
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.
4.
Mutual fund management expenses are covered by fees.
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True. Management costs are included in the 12b-1 fees.
5.
What are a security's increases in value called after they are sold?
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Capital gains. They are capital gains after they are sold, but paper profit while they are still held.
6.
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.
7.
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.
8.
Stock mutual funds are oriented toward _______.
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Growth. Because stocks have growth potential, stock funds include them.