Funds Intermediate: Balanced Mutual Funds

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1.
The "balance" in a balanced mutual fund usually means ________.
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Assets that grow are mixed with assets that generate income. With this approach, balanced funds minimize the losses of high-volatility assets.
2.
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.
3.
One of the goals of a balanced mutual fund is to ________.
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Conserve principal. Balanced funds are fairly conservative. They do not have rapid growth or tax savings as goals.
4.
Mutual funds with high asset turnover have higher transaction costs than funds with low turnover.
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True. Transaction costs can lower the return on a fund. This happens because transaction costs are deducted from the assets in a fund.
5.
A portfolio is diversified if it focuses primarily on one asset class.
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False. A portfolio is diversified if it contains several types of assets with different characteristics.