MBA 621 FINAL | 2024 -2025 LATEST UPDATED | COMPREHENSIVE
QUESTIONS WITH 100% RATED ANSWERS | GUARANTEED TO PASS!!
How do open end mutual funds differ from closed end mutual funds? - (answers)Shares of open
end mutual funds can be sold back to the sponsoring investment company whereas shares of
closed end mutual funds can not.
How can mutual funds generate returns to their shareholders? - (answers)Mutual funds can
provide dividends or capital gain distributions to investors. In addition, investors also benefit
from share price appreciation. They may be able to sell the shares at a higher price than they
paid.
Support or refute the following statement: Investors can avoid all types of risk by purchasing a
mutual fund that contains only treasury bonds. - (answers)A mutual fund containing treasury
bonds is susceptible to interest rate risk. If interest rates rise, the market value of the treasury
bonds contained in the mutual fund will decline.
According to recent research, have mutual funds outperformed the market? Would mutual funds
be attractive to some investors even if they are not expected to outperform the market? -
(answers)Mutual funds have not outperformed the market. Mutual funds might be attractive to
some investors because they allow some diversification which they could not afford to achieve
on their own (purchasing hundreds of stocks).
一个充满爱心的人，能温暖他人，
How do money market funds differ传递希望。人与人之间的情感交流
from other types of mutual funds? - (answers)Money market
funds are composed of money market securities, such as Treasury bills, commercial paper,
Eurodollar deposits, bankers acceptances, repurchase agreements, or CDS. Conversely, mutual
funds are composed of stocks and bonds.
How is whole life insurance a form of savings to policy holders? - (answers)Whole life insurance
is permanent as it protects the policy holder until death or as long as premiums are promptly
paid. It is a form of savings as it builds a cash value the policy holder is entitled to even if the
policy is cancelled.
,How do whole life and term insurance differ? - (answers)Term insurance provides insurance only
over a specified term, it is not permanent like whole life insurance.
Term insurance does not build a cash value so it is not a savings mechanism.
Term insurance is less expensive then whole life.
Identify the characteristics of Universal Life Insurance? - (answers)Universal life insurance
specifies a time period over which the policy exists. It builds a cash value over the term of the
policy.
What are the main assets of life insurance companies? - (answers)Life insurance companies
invest in government securities, corporate securities, mortgages, real estate, and policy loans.
What is a policy loan? When is it usually used? - (answers)A policy loan occurs as insurance
companies lend funds to whole life policy holders based upon their cash value of the policy.
They are popular during times of rising interest rates as they have a guaranteed rate of interest, so
are less expensive sources of funds during these times.
What is the main use of funds by life insurance companies? - (answers)Corporate bonds.
What is reinsurance? - (answers)Reinsurance permits companies to write large policies by
allocating a portion of the risk to other insurance companies, but they then must share the return.
一个充满爱心的人，能温暖他人，
传递希望。人与人之间的情感交流
Describe a defined benefit plan and a defined contribution plan. - (answers)For a defined benefit
plan, contributions are dictated by the benefits that will eventually be provided.
The benefits provided by the defined contribution plan are determined by the accumulated
contributions and the return on the funds investment performance. This plan allows a firm to
know with certainty the amount of funds to contribute.
Explain the general difference in the composition of pension portfolios managed by trusts versus
insurance companies. - (answers)Pension portfolios managed by trusts offer potentially higher
returns than insured plans and have a higher degree of risk. This difference occurs because assets
, managed by insurance companies (insured plans) are owned by insurance companies and are
designed to create annuities.
Mutual funds - (answers)investment companies that sell shares and use the proceeds to manage a
portfolio of securities.
compare mutual funds to depository institutions - (answers)Like depository institutions, mutual
funds repackage proceeds from individuals to make investments
Unlike bank deposits, mutual funds represents partial ownership
Mutual funds adhere to a variety of federal and state regulations - (answers)MF's must register
with SEC
Funds must provide a prospectus to investors
Disclosure since 1993 of manager's name and length of time employed in that position
Must disclose performance
Information contained in a prospectus - (answers)The minimum amount of investment required
The investment objective of the fund
The return on the fund over the past year, the past three years and the the past five years
The exposure of the fund to various types of risk
一个充满爱心的人，能温暖他人，
Services the fund offers
传递希望。人与人之间的情感交流
The fees incurred and passed on to investors
Estimating the net asset value - (answers)Net asset value is the value per share
Estimated daily
Determine the market value of all the securities in the fund
Any interest or dividends added in
Expenses subtracted
QUESTIONS WITH 100% RATED ANSWERS | GUARANTEED TO PASS!!
How do open end mutual funds differ from closed end mutual funds? - (answers)Shares of open
end mutual funds can be sold back to the sponsoring investment company whereas shares of
closed end mutual funds can not.
How can mutual funds generate returns to their shareholders? - (answers)Mutual funds can
provide dividends or capital gain distributions to investors. In addition, investors also benefit
from share price appreciation. They may be able to sell the shares at a higher price than they
paid.
Support or refute the following statement: Investors can avoid all types of risk by purchasing a
mutual fund that contains only treasury bonds. - (answers)A mutual fund containing treasury
bonds is susceptible to interest rate risk. If interest rates rise, the market value of the treasury
bonds contained in the mutual fund will decline.
According to recent research, have mutual funds outperformed the market? Would mutual funds
be attractive to some investors even if they are not expected to outperform the market? -
(answers)Mutual funds have not outperformed the market. Mutual funds might be attractive to
some investors because they allow some diversification which they could not afford to achieve
on their own (purchasing hundreds of stocks).
一个充满爱心的人，能温暖他人，
How do money market funds differ传递希望。人与人之间的情感交流
from other types of mutual funds? - (answers)Money market
funds are composed of money market securities, such as Treasury bills, commercial paper,
Eurodollar deposits, bankers acceptances, repurchase agreements, or CDS. Conversely, mutual
funds are composed of stocks and bonds.
How is whole life insurance a form of savings to policy holders? - (answers)Whole life insurance
is permanent as it protects the policy holder until death or as long as premiums are promptly
paid. It is a form of savings as it builds a cash value the policy holder is entitled to even if the
policy is cancelled.
,How do whole life and term insurance differ? - (answers)Term insurance provides insurance only
over a specified term, it is not permanent like whole life insurance.
Term insurance does not build a cash value so it is not a savings mechanism.
Term insurance is less expensive then whole life.
Identify the characteristics of Universal Life Insurance? - (answers)Universal life insurance
specifies a time period over which the policy exists. It builds a cash value over the term of the
policy.
What are the main assets of life insurance companies? - (answers)Life insurance companies
invest in government securities, corporate securities, mortgages, real estate, and policy loans.
What is a policy loan? When is it usually used? - (answers)A policy loan occurs as insurance
companies lend funds to whole life policy holders based upon their cash value of the policy.
They are popular during times of rising interest rates as they have a guaranteed rate of interest, so
are less expensive sources of funds during these times.
What is the main use of funds by life insurance companies? - (answers)Corporate bonds.
What is reinsurance? - (answers)Reinsurance permits companies to write large policies by
allocating a portion of the risk to other insurance companies, but they then must share the return.
一个充满爱心的人，能温暖他人，
传递希望。人与人之间的情感交流
Describe a defined benefit plan and a defined contribution plan. - (answers)For a defined benefit
plan, contributions are dictated by the benefits that will eventually be provided.
The benefits provided by the defined contribution plan are determined by the accumulated
contributions and the return on the funds investment performance. This plan allows a firm to
know with certainty the amount of funds to contribute.
Explain the general difference in the composition of pension portfolios managed by trusts versus
insurance companies. - (answers)Pension portfolios managed by trusts offer potentially higher
returns than insured plans and have a higher degree of risk. This difference occurs because assets
, managed by insurance companies (insured plans) are owned by insurance companies and are
designed to create annuities.
Mutual funds - (answers)investment companies that sell shares and use the proceeds to manage a
portfolio of securities.
compare mutual funds to depository institutions - (answers)Like depository institutions, mutual
funds repackage proceeds from individuals to make investments
Unlike bank deposits, mutual funds represents partial ownership
Mutual funds adhere to a variety of federal and state regulations - (answers)MF's must register
with SEC
Funds must provide a prospectus to investors
Disclosure since 1993 of manager's name and length of time employed in that position
Must disclose performance
Information contained in a prospectus - (answers)The minimum amount of investment required
The investment objective of the fund
The return on the fund over the past year, the past three years and the the past five years
The exposure of the fund to various types of risk
一个充满爱心的人，能温暖他人，
Services the fund offers
传递希望。人与人之间的情感交流
The fees incurred and passed on to investors
Estimating the net asset value - (answers)Net asset value is the value per share
Estimated daily
Determine the market value of all the securities in the fund
Any interest or dividends added in
Expenses subtracted
