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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Interest rates
Total returns of similar balanced funds
Brokerage performance
Total returns of similar balanced funds. Compare the funds total return to those of other funds with similar investment strategies.
2.
Balanced mutual funds are less conservative than pure stock funds.
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True
False
False. Balanced funds are more conservative than pure stock funds. They contain a lot of bonds.
3.
A portfolio is diversified if it focuses primarily on one asset class.
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True
False
False. A portfolio is diversified if it contains several types of assets with different characteristics.
4.
Balanced mutual funds have higher returns than equity mutual funds when the stock market rises.
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True
False
False. Balanced mutual funds do not usually offer as high a return as equity funds, whether or not the market rises.
5.
An asset allocation mutual fund can be more volatile than a balanced fund.
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True
False
True. Asset allocation funds can be more volatile than balanced funds, depending upon their asset mix and investment objectives.
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