Funds Intermediate: Fund Warning Signs

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
If a mutual fund starts out as a small-cap fund, it may eventually become a mid-cap or large-cap fund.
Choose wisely. There is only one correct answer.
True. Some funds change their focus years later.
2.
Which of the following is not a good way to find out if your fund is on the verge of change?
Choose wisely. There is only one correct answer.
Keep an eye on your funds performance only. Fund performance isnt everything; it wont reflect a manager change, for example, or clue you in to changes that may be on the horizon.
3.
A funds asset growth can lead to many problems. Which of the following is not typically one of them?
Choose wisely. There is only one correct answer.
Higher expenses. As assets grow, expenses may decline. But performance may stall, and the funds manager may have to change his or her strategy to accommodate all that money.
4.
Which type of fund is least likely to be affected by a change in management?
Choose wisely. There is only one correct answer.
An index fund. Index funds mimic indexes; no matter who is managing, the selection of stocks will be according to that benchmark.
5.
A funds performance can be affected when new funds are added to the family it belongs to.
Choose wisely. There is only one correct answer.
True. Sometimes, a fund will lose its focus or change its role within the fund.