Funds Intermediate:
Conservative Mutual Funds
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1.
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.
2.
A main objective of conservative mutual funds is to generate current income.
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True
False
True. The income objective is one of the defining characteristics of conservative funds.
3.
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.
4.
Conservative mutual funds actively trade their investments.
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True
False
False. Conservative mutual funds rarely trade their investments.
5.
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.
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