Funds Intermediate: Balanced Mutual Funds

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
An asset allocation mutual fund can be more volatile than a balanced fund.
Choose wisely. There is only one correct answer.
True. Asset allocation funds can be more volatile than balanced funds, depending upon their asset mix and investment objectives.
2.
Balanced mutual funds are less conservative than pure stock funds.
Choose wisely. There is only one correct answer.
False. Balanced funds are more conservative than pure stock funds. They contain a lot of bonds.
3.
Which of the following is not one of the main asset classes in a balanced mutual fund?
Choose wisely. There is only one correct answer.
Annuities. The three main asset classes in balanced mutual funds are stocks, bonds, and cash.
4.
Balanced mutual funds have higher returns than equity mutual funds when the stock market rises.
Choose wisely. There is only one correct answer.
False. Balanced mutual funds do not usually offer as high a return as equity funds, whether or not the market rises.
5.
Mutual funds with high asset turnover have higher transaction costs than funds with low turnover.
Choose wisely. There is only one correct answer.
True. Transaction costs can lower the return on a fund. This happens because transaction costs are deducted from the assets in a fund.