Funds Intermediate: Growth Mutual Funds

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1.
Large-cap companies are popular choices for growth mutual funds.
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False. Although they may be included, they are not as frequently chosen as small-caps and mid-caps are. These latter companies generally have more room to grow than large-caps do.
2.
Growth mutual funds pay few or no dividends because the companies they invest in usually reinvest their profits for more growth.
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True. Reinvesting profits adds to a companys capitalization.
3.
Which of the following terms is not likely to be found in the name of a growth mutual fund?
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"Income." Growth funds do not pay enough income to warrant the use of a word like "income" in their names.
4.
What is the objective of growth mutual funds?
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To grow over time. The objective of growth funds is to grow in value over time. Providing income is not a priority.
5.
Growth mutual funds rarely make the list of top ten funds from one year to the next because _______.
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They are very volatile. They may not perform as well as "top ten" funds every year, but over the course of many years, they show steady growth.