Funds Intermediate: Balanced Mutual Funds

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1.
To evaluate a balanced mutual fund, it is best to compare its total return with _______.
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Total returns of similar balanced funds. Compare the funds total return to those of other funds with similar investment strategies.
2.
The difference between a balanced mutual fund and an asset allocation mutual fund is ________.
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No fixed asset class percentages. Unlike in balanced funds, managers of asset allocation funds can change their asset class percentages as much as they choose.
3.
An asset allocation mutual fund can be more volatile than a balanced fund.
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True. Asset allocation funds can be more volatile than balanced funds, depending upon their asset mix and investment objectives.
4.
Balanced mutual funds are less conservative than pure stock funds.
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False. Balanced funds are more conservative than pure stock funds. They contain a lot of bonds.
5.
Which of the following is not one of the main asset classes in a balanced mutual fund?
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Annuities. The three main asset classes in balanced mutual funds are stocks, bonds, and cash.