FINANCE CHPA 17,18,19
STUDY QUESTIONS AND
CORRECT ANSWERS
GRADED A+ 2025-2026
1. Which of the following is not a reason for investing in mutual funds?
A) Small amount of funds needed
B) Portfolio manager expertise
C) Specific investment goals
D) Overly diversified - ANS-D) Overly diversified
2. Advantages of investing in mutual funds include all of the following except
A) diversification of your investment.
B) professional management.
C) meeting specific investment goals.
D) there is virtually no risk of loss. - ANS-D) there is virtually no risk of loss.
3. The ________ is the market value of the securities that a mutual fund has purchased
minus any liabilities.
A) book value
B) net asset value
C) gross asset value
D) net worth value - ANS-B) net asset value
, 4. The net asset value (NAV) is reported in financial newspapers and on financial Web
sites
A) for the total fund family.
B) on a per-share basis.
C) as a percentage of the fund's price.
D) on a weekly basis due to the complexity of computation. - ANS-B) on a per-share
basis.
5. In calculating the net asset value (NAV), which of the following is true?
A) Dividends are subtracted and expenses added
B) Interest is subtracted and expenses are added
C) Dividends are added and expenses are subtracted
D) Interest and other expenses are not included - ANS-C) Dividends are added and
expenses are subtracted
6. Which of the following is not a true statement about mutual funds?
A) All require a minimum investment.
B) All have the same investment goals.
C) The calculation of net asset value is the same.
D) All have a management expense ratio. - ANS-B) All have the same investment goals.
7. To calculate the NAV, the market value of the portfolio less liabilities is divided by
the ________ to arrive at a per-share basis.
A) original number of shares
B) shares currently issued by the fund
C) maximum shares to be issued
D) average number of shares in comparable funds - ANS-B) shares currently issued by
the fund
8. Mutual funds that sell shares directly to investors and repurchase shares investors
want to sell are called ________ funds.
A) open-market
STUDY QUESTIONS AND
CORRECT ANSWERS
GRADED A+ 2025-2026
1. Which of the following is not a reason for investing in mutual funds?
A) Small amount of funds needed
B) Portfolio manager expertise
C) Specific investment goals
D) Overly diversified - ANS-D) Overly diversified
2. Advantages of investing in mutual funds include all of the following except
A) diversification of your investment.
B) professional management.
C) meeting specific investment goals.
D) there is virtually no risk of loss. - ANS-D) there is virtually no risk of loss.
3. The ________ is the market value of the securities that a mutual fund has purchased
minus any liabilities.
A) book value
B) net asset value
C) gross asset value
D) net worth value - ANS-B) net asset value
, 4. The net asset value (NAV) is reported in financial newspapers and on financial Web
sites
A) for the total fund family.
B) on a per-share basis.
C) as a percentage of the fund's price.
D) on a weekly basis due to the complexity of computation. - ANS-B) on a per-share
basis.
5. In calculating the net asset value (NAV), which of the following is true?
A) Dividends are subtracted and expenses added
B) Interest is subtracted and expenses are added
C) Dividends are added and expenses are subtracted
D) Interest and other expenses are not included - ANS-C) Dividends are added and
expenses are subtracted
6. Which of the following is not a true statement about mutual funds?
A) All require a minimum investment.
B) All have the same investment goals.
C) The calculation of net asset value is the same.
D) All have a management expense ratio. - ANS-B) All have the same investment goals.
7. To calculate the NAV, the market value of the portfolio less liabilities is divided by
the ________ to arrive at a per-share basis.
A) original number of shares
B) shares currently issued by the fund
C) maximum shares to be issued
D) average number of shares in comparable funds - ANS-B) shares currently issued by
the fund
8. Mutual funds that sell shares directly to investors and repurchase shares investors
want to sell are called ________ funds.
A) open-market
