Mutual Funds Reviewer

IDENTIFICATION

1. The mistake that people at all income levels make with __________ account is not

taking advantage of them and delaying it.

Answer: RETIREMENT

2. This includes balances on such items as credit cards and auto loans.

Answer: CONSUMER DEBTS

3. It is the best place to store your down payment money if you’re looking to buy a home

soon.

Answer: MONEY MARKET FUND

4. It is a measurement of the amount of money, expressed as a percentage or ratio, that a

person deducts from their disposable personal income —

Answer: SAVINGS RATE

5. If your _______ falls between three and seven years, you want to focus on bond funds.

Answer: TIME HORIZON

6. It is the degree of variability in investment returns that an investor is willing to withstand

in their financial planning.

Answer: RISK TOLERANCE

7. In here, seven or more years down the road, stock funds are probably your ticket.

Answer: LONG-TERM GOALS

8. It is an amount of money that should be equal to three to six months of your household's

expenses

Answer: EMERGENCY FUND

9. It is calculated by dividing your monthly savings amount by your monthly gross income, and

then multiply that decimal by 100 to get a percentage.

Answer: SAVING or SAVINGS

10. It is a goal-specific tools, and humans are goal-driven animals, which is perhaps why the two

make such a good match

Answer: MUTUAL FUNDS

11. It is a fund that cushions your fall when life unexpectedly trips you up.

Answer: PILLOW FUND

12. In order to try and earn high returns, you have to take ____.

Answer: GREAT RISK

13. Without _________, a catastrophe could quickly wipe out your mutual funds and other

investments.

Answer: ADEQUATE INSURANCE COVERAGE

14. The point of _______ is to eliminate the financial downside of such a disaster and

protect your investments.

Answer: INSURANCE

15. For most people, reducing _______ is the more feasible option.

Answer: SPENDING

16. Leaving your excess money in a bank savings or checking account is a decision,

however, it may also indicate that you’re afraid of _______.

Answer: VOLATILE INVESTMENTS

17. To get the best mortgage terms for a house, how many percent of the purchase price

should you aim for making a down payment?

Answer: 20%

18. This is part of a prospectus that explains in detail what the fund is trying to

accomplish and what risks the fund is subject to.

Answer: INVESTMENT OBJECTIVES AND RISKS

19. This is part of a prospectus provides important background about the investment

Adviser, the folks actually managing the investments of this fund.

Answer: INVESTMENT ADVISER

20. The condensed version of a financial report's main elements

Answer: FINANCIAL HIGHLIGHTS

21. A pamphlet or brochure that provides information about a mutual fund.

Answer: PROSPECTUS

22. This part of the prospectus contains a synopsis of the main attributes of funds.
Answer: FUND PROFILE

23. It shows the annual dividends, or yield, that the fund has paid.

Answer: RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS

24. It tells how much trading takes place in a fund.

Answer: TURNOVER RATE

25. It simply means a commission

Answer: LOAD

MULTIPLE CHOICE:

26. If you can’t stomach big waves in the financial markets, don’t get in a small boat that

you’ll want to bail out of in a big storm.

a. Consider other “Investment” Possibilities

b. Assess the risk you are comfortable with

c. Review your insurance coverage

27. The following are the important financial steps except:

a. The financial pillow

b. Determine how much you’re saving

c. Maximize tax-deferred retirement account savings

28. A place to call your own is certainly the most tangible element of a Filipino dream.

a. Financial Pillow

b. White Picket Fence

c. Golden Egg

29. Mutual funds can help you achieve various_________?

a. Goals

b. Financial Goals

c. Short-term Goals

30. Checking your checkbook register, credit card bills, and any other documentation of your

spending history and tally up how much you spend is part of ____

a. Determine how much you're saving

b. Examine your spending and income

c. Pay off your consumer debts

31. What is the 7th important financial steps for you to take before you invest so you get the most from
your mutual fund investments?

a. Assess the risk you’re comfortable with

b. Consider other “investment” possibilities

c. Determine how much you’re saving

d. Examine your spending and income

32. Mutual funds are goal-specific tools, and humans are goal-driven animals, which is perhaps why the
two make such a good match.

a. Review your insurance coverage

b. Pay off your consumer debts

c. Figure out your financial goals

d. D. Consider other investment possibilities

33. In reviewing your insurance coverage, which of the following questions you

should consider?

a. Do you have adequate life insurance to provide for your dependents if you

die?

b. Do you carry long-term disability insurance to replace your income in case a

disability prevents you from working?

c. Do you have comprehensive health insurance coverage to pay for major

medical expenses?

d. All of the above

34. For most people, __________is more feasible option.

a. Reducing spending

b. Reducing savings

c. Pay off consumer debts

d. None of the above

35. It is an emergency reserve.

a. Saving for a home

b. Investing for retirement

c. Financial Pillow

d. None of the above

36. Making ________contributions reduces your tax bill, effectively giving you more dollars with which
to accomplish your various goals.

a. Retirement account

b. Savings account

c. Mortgage loan

d. Financial goals

37. If you need to tap into the money within two or three years or less, a money market or __________
may fit the bill.

a. Long-term bond

b. Long-term account

c. Short-term bond

d. Short-term account

38. If your time horizon falls between three and seven years, you want to focus on __________.

a. Bond Market

b. Bond Funds

c. Equity Funds

d. Balanced Funds
39. For long -term goals. Seven or more years down the road, __________ are probably your ticket.

a. Bond Funds

b. Bond Market

c. Stock Funds

d. Stock Market

40. The ideal savings vehicle for your emergency reserve fund is.

a. Investing

b. Capital Market

c. Stock Market

d. Money Market Fund

41. The Investment Company Institute, a mutual fund trade association, conducted a survey that asked
mutual fund buyers what info they reviewed about a fund before purchasing it?

a. evaluating gain-eating cost

b. losing the load
c. fund’s operating expenses

42. The funds they sold are known as?

a. Exposing loads
b. Loads deducted
c. load funds

43. One cost of fund ownership that you simply can’t avoid is operating expenses.

a. Total Fund Operating Expenses

b. Considering a fund’s operating expenses
c. fund’s operating expenses

44. Are quoted as a percentage of the fund’s assets or value.

a. Total Fund Operating Expenses

b. Considering a fund’s operating expenses
c. fund’s operating expenses

45. A fund’s performance, or its historic rate of return, is certainly an important factor to weigh when
selecting a mutual fund, investors tend to overemphasize its importance.

a. Exposing loads
b. Loads deducted
c. Weighing Performance and Risk
46. The resources and capabilities of the parent company should be equally important in your selection
of which funds to invest in.

a. Exposing loads
b. Recognizing the Fund Manager and Fund Family Expertise
c. Weighing Performance and Risk

47. A pamphlet or brochure that provides information about a mutual fund.

a. mutual fund prospectus

b. mutual fund company records
c. fund list

48. Before you save money toward anything, accumulate an amount of money equal

to about _____ of your household’s living expenses.

a. 3-6 months b. 9 months c. 1 year and 3 months

49. The following is included in common financial goals

a. Saving for retirement c. Emergency reserve

b. Home purchase d. All of the above

50. If your time horizon falls between three and seven years, you want to focus on

____ funds.

a. stock b. bond c. money market

51. The ___ you start to save, the ____ painful it is each year, because your

contributions have more years to compound.

a. sooner, less b. sooner, more c. later, less

52. For most people, reducing spending is the more feasible option. In which

financial step this statement fall?

a. Figure out your financial goals

b. Examine your spending and income

c. Determine how much you’re saving

53. Saving and investing is ______ rewarding and makes many people feel more

secure.

a. Psychologically b. Physically c. Mentally

TRUE OR FALSE:

54. Before you invest in a fund, make sure you’re comfortable with the level of risk the

fund is taking on.

Answer: TRUE

55. Saving and investing is psychologically rewarding and makes many people feel more secure.
Answer : TRUE

56. Determine how much you’re saving is not included in financial steps.

Answer : FALSE (Determine how much your savings is included in financial steps)

57. The single biggest mistake that mutual fund investors make is investing in funds before they’re
even ready to.

Answer : TRUE

58. Most people find saving money is not challenging.

Answer : FALSE (challenging)

59. A place to call your own is certainly the most tangible element of a Filipino dream.

Answer : TRUE

60. date helps you navigate the prospectus to find whatever information you want.

Answer: FALSE

61. The fund profile pages contain a synopsis of the main attributes of the fund, such as a description of
the fund’s investment objectives and the strategies.

Answer: TRUE

62. The Total Return represents what investors in the fund have earned historically.

Answer: TRUE

63. Funds also produce annual reports that discuss how the fund’s been doing and provide details on
the specific investments that a fund holds.

Answer: TRUE

64. The Statement of Net Assets section lists every investment the fund owns.

Answer: TRUE

65. The only way to be sure that a fund is truly no-load is to look at the prospectus for the fund.

Answer: TRUE

66. One cost of fund ownership that you can avoid is operating expenses
Answer: FALSE ( cant)

67. Realize that funds with relatively high returns may achieve their results by taking on a lot of risk
Answer: TRUE

68. Securities law requires every fund to issue a prospectus.

Answer: TRUE

69. A critical personal finance skill does not know how to read a mutual fund

prospectus.

Answer: FALSE

70. The fund profile provides a summary of the fund's key features.

Answer: TRUE

71. The total return represents what investors in the fund have earned in the future.

Answer: FALSE

72. With bond funds, expenses are a less important (but still important ) factor in

picking a fund.

Answer: FALSE

73. Expenses are critical on money mutual funds and are very important on stocks

funds.

Answer: FALSE

74. In the investment adviser you can read here about the firm as well as the specific

individuals who make the fund’s investment decisions.

Answer: TRUE

75. Securities law requires every fund to issue a prospectus.

Answer: TRUE

76. A critical personal finance skill does not know how to read a mutual fund

prospectus.

Answer: FALSE

77. The fund profile provides a summary of the fund's key features.

Answer: TRUE

78. The total return represents what investors in the fund have earned in the future.
Answer: FALSE

79. A fund's operating expenses are quoted as a percentage of the fund's assets or

value.

Answer: TRUE

80. Expenses are critical on money mutual funds and are very important on stocks

funds.

Answer: FALSE