30 Questions
Which types of investment companies are classified by the Investment Company Act of 1940?
Closed-end funds and open-end funds
What is the purpose of the Investment Company Act of 1940?
To regulate investment companies and protect investors
What is the total value of assets managed by U.S.-registered investment companies at year-end 2023?
$28.9 trillion
What percentage of U.S. households are invested in funds?
54.7%
What is the main advantage of investing in mutual funds and ETFs?
Diversification
What is an important factor to consider when investing in mutual funds and ETFs?
Investment company structure
What is the most common reason for households to invest in funds?
Retirement
According to the text, what is the median number of mutual funds owned?
3
What percentage of US-registered investment company total net assets were held by equity funds at year-end 2022?
57%
Which type of funds are sold at premium or discount to NAV to other investors?
Closed-end funds
Which investment companies have a fixed number of shares issued and can be bought or sold on an exchange?
Closed-end funds
What is the formula for calculating the price per share when the NAV is $13 and the front-end load is 4%?
P = 13 + 0.96(P)
What percentage of mutual fund and ETF assets were managed by the five largest firms at year-end 2022?
55%
What was the total net assets in US-registered investment companies at year-end 2022?
$28.9 trillion
Which of the following fees affect return calculations?
Both front-end and back-end load fees
What is the formula to calculate the price you get when you sell a fund with a back-end load fee?
Price = NAV * (1 - back-end load fee)
What is the formula to calculate the gross return of a fund with a back-end load fee?
Gross return = NAV * (1 - back-end load fee)
What is the formula to calculate the gross return of a fund with annual expenses (expense ratio)?
Gross return = NAV * (1 - annual expenses)
What is the formula to calculate the gross return for an investor in a fund over n periods?
Gross return = (1 + r - f - b)^n
What is the formula to calculate the gross return for an investor in a CD over n periods?
Gross return = (1 + r)^n
What are some advantages of mutual funds?
All of the above
Which one of these is a disadvantage of investing in ETFs?
You pay the bid-ask spread when trading an ETF
What is the main difference between hedge funds and mutual funds?
Hedge funds use more speculative strategies, while mutual funds use little leverage or short-selling
What is the main advantage of investing in mutual funds?
Mutual funds offer high liquidity
What is the main disadvantage of investing in hedge funds?
Hedge funds have heavy regulation
What is the main difference between ETFs and closed-end funds?
ETFs offer high liquidity, while closed-end funds do not
What is the main advantage of investing in closed-end funds?
Closed-end funds can generate higher returns compared to ETFs
Which asset classes make up most of the ETF universe?
Managed investment companies
Which asset classes make up most of the mutual fund universe?
ETFs
How do loads affect the return of mutual funds?
Loads decrease the return of mutual funds
This quiz explores the impact of front-end load fees on investment returns. Test your knowledge on how these fees affect the gross return of a fund over a specific period of time. Learn about NAV growth and calculate your potential returns based on different investment amounts. Additionally, discover the concept of back-end load fees and how they are related to prices and contingent deferred sales charges.
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