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.
To evaluate a balanced mutual fund, it is best to compare its total return with _______.
Choose wisely. There is only one correct answer.
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.
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.
A portfolio is diversified if it focuses primarily on one asset class.
Choose wisely. There is only one correct answer.
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.
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.
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.