Funds Intermediate: Balanced Mutual Funds

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1.
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.
2.
Balanced mutual funds establish guidelines as to how much they can invest in each asset class.
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True. Balanced mutual funds establish guidelines as to how much of the fund can be invested in each asset.
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.
Which of the following can help you evaluate the performance of a balanced mutual fund?
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All of the above. Turnover, total return, and current asset holdings can all be used to judge a balanced funds performance.
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.