Funds Intermediate: Growth Mutual Funds

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1.
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.
2.
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.
3.
Stocks that sell below their worth are called _______ stocks.
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Value. Stocks that managers believe are selling for less than they are worth are called value stocks.
4.
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.
5.
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.