1. Why is the average investor often not confident about investing in stocks? Check all that apply. Lacks the time to do financial research Didn't listen to Dr. Williams's lectures Too many confusing options available Trained and works in something other than finance Finance people make it difficult on purpose 2. When you buy a mutual fund, you give the fund manager money, and then he/she your money with money from other investors. 3. The fund manager takes investors' money and adds and 4. List 3 advantages and 1 disadvantage provided by mutual funds. Advantages Disadvantage 5. Mutual fund shares are sold at In the example, Glenn's Discount Mutual fund sells for 6. Mutual Funds NAV example: The fund has 15,000 shares outstanding. What is the NAV per share? Company Sears Exxon AT&T Shares 1,000 2,000 1,500 Price per share $37.75 $43.70 $46.67 8. Charles Dow's profession was and (2) 9. Charles Dow and a colleague are famous for what 2 things? (1) 10. What is the only company that remained in the DJIA from the beginning through 2015? 11. What 2 advantages does the S&P 500 have over the DJIA? 12. Passive funds are designed to track 13. Hedge funds may take money only from investors. 14. Hedge funds will often short stocks as part of their strategy. This means they the stock and repay the shares later. Problem in class: You set up a long/short trade by shorting 100 shares of FSL at $10 per share and using the proceeds plus another $500 to purchase 50 shares of GDL at $30 per share. One-year later, FSL sells for $4 per share and GDL sells for $55 per share. What is your rate of return on this investment? 15. In 2006 Warren Buffet made a 10 year bet with hedge fund manager The amount of the bet was Warren chose the S&P 500 which was up _% during the 10 years. The hedge funds were up %. Multiple Choice Questions on the reverse