Funds Intermediate: Conservative Mutual Funds

Test your knowledge

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A secured bond is one that is backed by collateral.

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True

False

True. To be secured is to be backed by collateral.

Conservative stock funds invest in _______.

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Companies with low dividend payments

Companies with high dividend payments

Emerging-growth stocks

Companies with high dividend payments. The stocks of many of these companies have low volatility.

The main goal of a conservative mutual fund is to _______.

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Grow quickly

Reduce taxes

Conserve principal

Conserve principal. All other investment goals are secondary to this one.

Conservative mutual funds are best suited for investors with high risk tolerance.

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True

False

False. Conservative mutual funds are best suited for investors who are risk-averse.

Conservative mutual funds are generally suited for investors with a long time horizon.

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True

False

False. Conservative mutual funds are generally suited for investors with a short time horizon.

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