Capital Markets Activity 2 PDF

1. What are the Investment companies with a fixed number of outstanding shares that are bought and sold through secondary markets. – Closed-End Companies 2. What is a Mutual fund that issues new shares agree to redeem the shares on the demand of the shareholder. - Open-End Investment Company...

1. What are the Investment companies with a fixed number of outstanding shares that are bought and sold through secondary markets. – Closed-End Companies 2. What is a Mutual fund that issues new shares agree to redeem the shares on the demand of the shareholder. - Open-End Investment Company 3. What is the asset value of a share in an investment company; investment company’s assets minus liabilities divided by the number of shares outstanding – Net Asset Value 4. Extent to which the price of a closed-end investment company’s stock is less than the shares net asset value – Discount 5. Extent to which the price of a closed-end investment company’s stock exceeds the share’s net asset value. – Premium 6. True or False: Investment company purchases or sells securities, it also has to pay brokerage fees, which are passed on to you 7. True or False: Shares in mutual funds are traded like other stocks and bonds. 8. True or False: Mutual funds continuously offer to sell new shares at their new asset value plus a sale fee which is commonly called as a loading charge. 9. Mutual funds that does not charge a sales commission when individuals purchase shares from the fund is called as No-Load Fund 10. Mutual fund that charges commissions when individuals purchases shares from the funds is called as Load Fund 11. What is the loading charge that adopted an SEC rule that permits management to use the fund’s assets to pay for marketing expenses – 12b-1 fees 12. A type of mutual fund that stress assets that produce income – Income Funds 13. A type of mutual fund that stress appreciation in the value of the assets – Growth Funds 14. What refers to a portfolio manager’s investment philosophy or investment strategy. – Investment Style 15. which refers to the market value of the company - Capitalization 16. What are the largest company with market value exceeding $10 billion. – Large-cap Stocks 17. What are smaller firms with market value between $2 billion and $300 Million.- Small- cap Stocks 18. True or False: A fund cannot have more than one strategy 19. What spreads the risks of investing and reduces the risk of loss to the individual investors. - Diversification 20. What are the three types of mutual funds with international investments. – Global Funds, International Funds, Regional Funds 21. Mutual fund whose portfolio seeks to duplicate an index of stock prices. – Index Fund 22. The sales fee paid to the broker or financial advisor for buying the shares. – Loading Charge 23. This is referred to as the ability of the fund to earn a return without generating large amounts of tax obligations – Tax Efficiency