ESSENTIALS OF INVESTMENTS
(GLOBAL EDITION) CHAPTER 4
QUESTIONS WITH CORRECT ANSWERS
2026-2027
investment companies - correct answer-
financial intermediaries that invest the funds of individual investors in securities or other assets
net asset value (NAV) -Kcorrect answer-assets minus liabilities expressed on a per-share basis
unit investment trusts - correct answer-
money pooled from many investors that is invested in a portfolio fixed for the life of the fund
open-end fund - correct answer-a fund that issues or redeems its shares at net asset value
closed-end fund - correct answer-
shares may not be redeemed, but instead are traded at prices that can differ from net asset value
load -Kcorrect answer-a sales commission charged on a mutual fund
hedgeD1fundD1-D1correctD1answer-
aD1privateD1investmentD1pool,D1openD1toD1wealthyD1orD1institutionalD1investors,D1thatD1isD1exemptD1fromD1SECD1r
egulationD1andD1canD1thereforeD1pursueD1moreD1speculativeD1policiesD1thanD1mutualD1funds
fundsD1ofD1fundsD1-KcorrectD1answer-
mutualD1fundsD1thatD1primarlyD1investD1inD1sharesD1ofD1otherD1mutualD1funds
12-b1D1feesD1-D1correctD1answer-
annualD1feesKchargedD1byD1aD1mutualD1fundD1toD1payD1forD1marketingD1andD1distributionD1costs
softD1dollarsD1-KcorrectD1answer-
theD1valueD1ofD1researchD1servicesD1thatD1brokerageD1housesD1provideD1'freeD1ofD1charge'D1inD1exchangeD1forD1th
eD1investmD1enstD1manager'sD1business
(GLOBAL EDITION) CHAPTER 4
QUESTIONS WITH CORRECT ANSWERS
2026-2027
investment companies - correct answer-
financial intermediaries that invest the funds of individual investors in securities or other assets
net asset value (NAV) -Kcorrect answer-assets minus liabilities expressed on a per-share basis
unit investment trusts - correct answer-
money pooled from many investors that is invested in a portfolio fixed for the life of the fund
open-end fund - correct answer-a fund that issues or redeems its shares at net asset value
closed-end fund - correct answer-
shares may not be redeemed, but instead are traded at prices that can differ from net asset value
load -Kcorrect answer-a sales commission charged on a mutual fund
hedgeD1fundD1-D1correctD1answer-
aD1privateD1investmentD1pool,D1openD1toD1wealthyD1orD1institutionalD1investors,D1thatD1isD1exemptD1fromD1SECD1r
egulationD1andD1canD1thereforeD1pursueD1moreD1speculativeD1policiesD1thanD1mutualD1funds
fundsD1ofD1fundsD1-KcorrectD1answer-
mutualD1fundsD1thatD1primarlyD1investD1inD1sharesD1ofD1otherD1mutualD1funds
12-b1D1feesD1-D1correctD1answer-
annualD1feesKchargedD1byD1aD1mutualD1fundD1toD1payD1forD1marketingD1andD1distributionD1costs
softD1dollarsD1-KcorrectD1answer-
theD1valueD1ofD1researchD1servicesD1thatD1brokerageD1housesD1provideD1'freeD1ofD1charge'D1inD1exchangeD1forD1th
eD1investmD1enstD1manager'sD1business
