1. The document that publicly discloses relevant financial data for a firm issuing securities and all provisions applicable to the security is a _________.

a. SEC preferred disclosure form b. 1040 disclosure form c. shelf-registration d. prospectus e. primary statement

2. Money market mutual funds invest mostly in _________

A. stocks. B. long-term corporate bonds. C. real estate. D. short-term securities. E, long-term Treasury bonds.

3. You invest $12,500 in Fund VSML at the start of the year. The fund has a front-end load of 3% and an annual expense fee of 2.25% of the ending asset value at year end. You expect the fund to have a gross rate of return of 8% this year. With your investment, what is your expected value in one year?

A. Under $12,250 B. Between $12,250 and $12,500 C. Between $12,500 and $12,750 D. Between $12,750 and $13,000 E. Over $13,000

4. Investor demand for the shares determines the number of shares outstanding in a(n) __________.

A. general partnership B. limited partnership C. open-end mutual fund D. REIT E. closed-end mutual fund

5. Fees considered 12b-1 fees are:

A. fees that investment companies must pay to the SEC. B. fees charged by some mutual funds, due to distribution and marketing costs. C. up-front load fees, charged by some mutual funds. D. back-end load fees, charged by some mutual funds. E. fees charged by mutual funds, to compensate the portfolio manager.

6. Verysmall Mutual Funds investment portfolio is comprised of the following: 1,000 shares of General Mills (GIS, current price is $50 per share); 3,000 shares of Bank of America Corp (BAC, current price is $30 per share); and 2,500 shares of United Airlines Holdings (UAL), current price is $90 per share). Verysmall Mutual Fund has sold a total of 15,000 of its own shares to customers. What is Verysmall Mutual Funds net asset value?

A. Less than $20 B. Between $20 and $30 C. Between $30 and $40 D. Between $40 and $50 E. Over $50

7. A no-load mutual fund:

A. has zero operating expenses. B. is typically marketed directly to customers, charging no commission. C. is a type that no longer exists. D. does not invest in common stocks. E. has a zero or negative rate of return in the most recent year.

8. Hedge funds differ from open-end mutual funds in the sense that ______

A. they require a much smaller initial investment. B. they are open to additional investments at any time. C. their investors cannot sell shares back to the fund at any time they desire. D. they invest in very limited set of securities. E. they declare their investment strategies in the prospectus.

9. Hedge funds are ______ transparent than mutual funds because of ______ strict SEC regulation on hedge funds compared to mutual funds.

A. more; more B. more; less C. less; less D. less; more E. none of the above can be stated for certain

10. The risk profile of hedge funds ______, making performance evaluation ______.

A. can shift rapidly and substantially; challenging B. can shift rapidly and substantially; straightforward C. is stable; challenging D. is stable; straightforward E. none of the above