Funds Intermediate: Growth Mutual Funds

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1.
How do the managers of growth mutual funds enable their funds to grow in value?
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They invest in the stocks of companies they believe will outperform the market average. They believe there is a demand for these stocks, which will increase in price.
2.
Growth funds seek to grow for the short term.
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False. Even though they try to earn large profits quickly, growth funds seek to grow over long periods.
3.
The performance of a growth mutual fund depends upon the _______ of the securities it contains.
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Performance. A fund is only as good as the investments it contains.
4.
The stocks that growth mutual funds invest in may not pay dividends.
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True. A corporation may reinvest its surplus earnings back into its stocks to expand the company rather than pay dividends.
5.
The Acme Internet Enterprise Fund, which is an up-and-coming Internet mutual fund, is likely to be a sector fund.
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True. According to its name, it invests in one area of the marketthe Internet.