If a mutual fund specializes in the securities of one sector of the economy, unsystematic risk may not be reduced.

Question 1 options:

	a) True
	b) False

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Question 2 (2.5 points)

Investments in mutual funds permit the investor to avoid market risk.

Question 2 options:

	a) True
	b) False

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Question 3 (2.5 points)

The advantages offered by investment companies include 1. professional management 2. avoidance of income taxes by the investor 3. portfolio diversification

Question 3 options:

a)

1 and 2

b)

1 and 3

c)

2 and 3

d)	all of the above

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Question 4 (2.5 points)

If an investment company were liquidated, the investor should receive the net asset value.

Question 4 options:

	a) True
	b) False

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Question 5 (2.5 points)

No-load funds with 12b-1 fees are able to charge their existing shareholders for marketing expenses.

Question 5 options:

	a) True
	b) False

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