1. Active bond trading strategies include
I and III
II and IV
I, II and III
II, III and IV
4.5 points
Question 2
1. A bond's yield to maturity is equal to the internal rate of return of its cash flows.
True
False
4.5 points
Question 3
1. Nearly all mutual funds operate as regulated investment companies. This means that
they are no-load funds.
portfolio decisions are mandated by government authorities.
they do not pay taxes on their income.
their investments are guaranteed by the FDIC.
4.5 points
Question 4
1. The current yield on a bond is most similar to
the discount rate on a Treasury Bill.
the effective annual rate on a certificate of deposit.
the dividend yield on a stock.
the internal rate of return if the bond is held to maturity.
4.5 points
Question 5
1. Trading in closed-end investment companies takes place between investors in the open market.
True
False
4.5 points
Question 6
1. A unit investment trust
engages in short-term trading within a particular sector.
offers a low-cost, diversified portfolio.
is an unmanaged portfolio of securities.
is used only for fixed-income securities.
4.5 points
Question 7
1. Many funds advertise their returns as the amount to which $10,000 invested in the fund would have grown to over 5 or 10 years. These results assume that
all dividends, interest and capital gains on a pre-tax basis are reinvested in the fund.
all dividends and capital gains less a 15% deduction for taxes are reinvested in the fund.
all dividends and interest are reinvested in the fund.
no dividends or capital gains are reinvested in the fund.
4.5 points
Question 8
1. Only realized capital gains from mutual fund investments are currently taxable for individual income tax purposes.
True
False
4.5 points
Question 9
1. Mutual funds often report returns as the growth of $10,000 over a period of time. These returns assume that
all dividends and capital gains are reinvested.
all dividends and capital gains are withdrawn.
all dividends and capital gains are reinvested after deductions for income taxes.
the investor contributes money to the fund on a regular basis through an automatic investment plan.
4.5 points
Question 10
1. Income from ________ is exempt from federal income taxes?
money market funds
municipal bond funds
government bond funds
REITs
