MBA Blemba 72 - Market Instruments

Which one of the following statements regarding open-end mutual funds is false? 

• The funds redeem shares at net asset value

• The fund offers investor ptofessional management

• The fund offers a guaranted return

• There is no right answer

Which of the following statements about Money Market Mutual Funds is true? 

• They are highly leveraged and risky.

• They invest in commercial paper, CDs, and short term bonds.

• Return of this fund ussually same or less rhan CD

• There is no right answers

ETF or Exchange Traded Fund is

• Traded on the Exchange

• purchased from the Fund Manager

• determined price once a day

• there is no correct answer

Which of the following would increase the net asset value of a mutual fund share, assuming all other things remain unchanged? 

• an increase in the number of fund shares outstanding

• an increase in the fund's accounts payable

• a change in the fund's management

• an increase in the value of one of the fund's stocks

Which of the following istruments that will potentialy giving the highest return?

• Equity

• Bonds

• A mix of stocks and bonds

• Option

EBA Ritel is basically

• Equity

• Short Term Bonds

• Mortgage backed Securities

• A mix of Stocks and Bond

When you buy a call option, you are expecting that the underlying asset

• going up in price in the future

• going down in price in the future

• neither going up nor going down in price

• there is no correct answer

When you buy put option, you are expecting that the underlying asset will be

• going up in price in the future

• going down in price in the future

• staying flat in price

• there is no correct answer

The risk of Balanced Mutual Funds is

• higher than Stock Mutual Funds

• lower than Bond Mutual Funds

• higher than Bond Mutual Funds

• Lower than Money Market Mutual Fund

The reason to invest in mutual fund is the following, except:

• Risk Diversification

• Managed by Professional Management

• result in higher return compare to equity

• there is no correct answer