Funds Intermediate: Growth Mutual Funds

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1.
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.
2.
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.
3.
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.
4.
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.
5.
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.