Answers26-27 Ignite Financial Literacy Personal Finance - EL3403Homeowners Insurance

Mutual Funds Answers

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1
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Choose the words to fill in the blank, which best complete the sentence. Cross-hatching provides an illusion of various ______(1)_______, while impasto provides an illusion of ______(2)_______.

A
(1) depths; (2) tone
B
(1) distances; (2) definition
C
(1) shadows; (2) light
D
(1) values; (2) depth
2
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Why would a mutual fund, a collection of stocks, bonds, and other securities, have less risk than investing in stocks alone?

A
Stocks are higher risk than most other securities in a mutual fund, but when averaged with the risk of the other securities, mutual fund risk is not as high as stock risk.
B
Mutual funds are controlled primarily by their investors, and those investors would do anything they could to keep their mutual fund from decreasing in value.
C
Because mutual funds eliminate the middle man, there is far less room for error and higher chance for greater profit.
D
Mutual funds, by nature, are a mutual agreement between company and investor, and failure to comply on either side presents reprecussions, the fear of which lowers the risk of the investment.
3

Chyra redeemed 175 shares of stock she owned in the fund shown below.Name of FundNAVOffer PriceCAH Group$15.83$16.27What were Chyra’s proceeds?

A
$77.00
B
$2,770.25
C
$2,847.25
D
$5,617.50
4

Elly buys 75 shares of stock in a mutual fund for a total investment of $450. She sells 50 shares of her stock for total proceeds of $400. Determine if Elly made a profit or loss, and how much per share.

A
loss of $0.67 per share
B
loss of $2 per share
C
profit of $0.67 per share
D
profit of $2 per share
5

Use the information in the table below to answer the following question.Name of FundNAVOffer PriceUpton Group$18.47$18.96Green Energy$17.29$18.01TJH Small-Cap$18.43$19.05WHI Health$20.96NLTracy buys 150 shares of Upton Group and 100 shares of WHI Health. What is Tracy’s total investment?

A
$4,940.00
B
$5,040.00
C
$5,914.50
D
$5,988.00
6

A mutual fund has total assets of 2.4 million dollars and 300,000 shares. What is the net asset value of one share of the fund?

A
$0.08
B
$0.80
C
$8.00
D
$80.00
7

Rochelle invests in 500 shares of stock in the fund shown below.Name of FundNAVOffer PriceHAT Mid-Cap$18.94$19.14Rochelle plans to sell all of her shares when she can profit $6,250. What must the net asset value be in order for Rochelle to sell?

A
$12.50
B
$31.44
C
$31.64
D
$100.00
8

Examine this piece of art by Jean-Auguste-Dominque Ingres, entitled, Napoleon on his Imperial Throne. All of the following examples display Ingres’ use of texture, except which?

Question illustration
A
The lace of Napoleon’s collar.
B
The red velvet cape with ermine lining.
C
The shine glaring off Napoleon’s face.
D
The thickness of the carpet.
9

An investor buys 400 shares of stock in a fund when the net asset value is $19.62 and the offer price is $19.84. The investor sells these shares when the net asset value is $43.19 and the offer price is $43.56. Determine the amount of profit the investor earns.

A
$9,576
B
$9,488
C
$9,428
D
$9,340
10

Use the information in the table below to answer the following question.Name of FundNAVOffer PriceUpton Group$18.47$18.96Green Energy$17.29$18.01TJH Small-Cap$18.43$19.05WHI Health$20.96NLFor which of the funds shown would you pay the most commission on the purchase of 100 shares?

A
Green Energy
B
TJH Small-Cap
C
Upton Group
D
WHI Health
11

Which of the following expressions is equal to the total proceeds of a mutual fund?

A
net assets times number of shares
B
net asset value times number of shares
C
offer price times number of shares
D
profit minus investment
12

A married couple buys 280 shares of stock for a total investment of $8,722. They decide to sell all of their shares in the fund at the listing value shown below.Name of FundNAVOffer PriceCEH Mid-Cap$31.05$31.20Determine if the couple makes a profit or loss, and how much per share.

A
loss of $0.05 per share
B
loss of $0.10 per share
C
profit of $0.05 per share
D
profit of $0.10 per share
13

Elly buys 75 shares of stock in a mutual fund for a total investment of $450. She sells 50 shares of her stock for total proceeds of $400. Determine if Elly made a profit or loss, and how much per share.

A
loss of $0.67 per share
B
loss of $2 per share
C
profit of $0.67 per share
D
profit of $2 per share
14

A mutual fund’s net asset value increases by $5 per share. An investor who owns 450 shares of this fund sells them all for a profit of $2,205. What can you conclude about the fund?

A
The fund is a no-load fund.
B
The fund had a $0.10 per share commission when purchased.
C
The fund had a $1.00 per share commission when purchased.
D
The fund had a $10.00 per share commission when purchased.
15

Sandra owns a bond issued by Animite Energy with a par value of $1,000. The bond pays 7.6% interest yearly and has a market rate of 93.411 when Sandra bought it. What is the current yield on Sandra’s bond?

A
0.076
B
0.074
C
0.081
D
0.089
16

A certain mutual fund has net assets of $1,359,600. One share of this fund has a net asset value of $11.33. How many shares make up the fund?

A
833
B
120,000
C
1,359,600
D
15,404,268
17

If you place a sheet of drawing paper over an object, securing it with tape to hold it in place, and color with the side of a pencil or crayon over the surface, what will you create?

A
A 3-dimensional replica of the object.
B
A picture that has an implied texture of the actual texture of the object.
C
An example of impasto.
D
An image which has actual texture and implied texture.
18

An investor buys 400 shares of stock in a fund when the net asset value is $19.62 and the offer price is $19.84. The investor sells these shares when the net asset value is $43.19 and the offer price is $43.56. Determine the amount of profit the investor earns.

A
$9,576
B
$9,488
C
$9,428
D
$9,340
19

Cheryl wants to purchase a par value $500 bond from Agram Imports. Agram Imports bonds have a market rate of 102.114 and offer 8.1% interest. If Cheryl’s broker charges a commission of 2.5% of the market value of each bond sold, what is the current yield on Cheryl’s bond?

A
0.077
B
0.078
C
0.081
D
0.040
20

A mutual fund’s net asset value increases by $5 per share. An investor who owns 450 shares of this fund sells them all for a profit of $2,205. What can you conclude about the fund?

A
The fund is a no-load fund.
B
The fund had a $0.10 per share commission when purchased.
C
The fund had a $1.00 per share commission when purchased.
D
The fund had a $10.00 per share commission when purchased.

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