1. Which of the following statements concerning mutual funds are correct?

1. They provide diversification for investors who have only a small amount to invest.
2. From the initial purchase of mutual fund shares, an investor is assured of a minimum income level and a stated redemption price.
3. They do not charge sales fees on initial investments.
4. Their earnings are exempt from federal income taxes at the corporate (mutual fund) level.

Group of answer choices

1 and 2.

1 and 4.

2 and 3.

3 and 4.

2. Which of the following statements concerning no-load mutual funds is (are) correct?

1. These funds do not charge a sales commission, but they may collect a redemption fee.
2. These funds may charge 12b-1 fees for marketing expenses.
3. Shares of these funds may be sold without a prospectus because they are sold by direct mail and media advertising.

Group of answer choices

1 only.

2 only.

1 and 2.

1, 2 and 3.

3. What is a disadvantage of an ETF?

Group of answer choices

a. They can be bought and sold at any time during market hours, like stocks and bonds.

b. They can be subject to brokerage commissions.

c. They can transfer securities out to redeeming shareholders.

d. They represent a basket of stocks and bonds.

4. How much in assets were invested in investment companies at the end of 2017?

Group of answer choices

Between $5 trillion and $10 trillion.

Between $10 trillion and $15 trillion.

Between $15 trillion and $20 trillion.

Over $20 trillion.

5. Which of the following mutual fund types will most likely have the highest total risk level?

Group of answer choices

A large-cap index fund.

A small-cap growth fund.

A large-cap international fund.

A mid-cap domestic equity fund.