T or F:

Mutual funds pay federal income taxes on dividends they receive from their investments.

Mutual funds distribute earned income and realized capital gains.

A mutual fund has a fixed number of shares.

If a stock increased from $25 to $50 in five years, the annual, compound rate of return was 20 percent.

Over time, holding period returns tend to overstate the annual rate of return.

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Features of convertible bonds include

1. fixed dividends

2. call feature

3. maturity date

A. 2 and 3

B. 1 and 3

C. 1 and 2

D. 1, 2, and 3

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