Chapter 6 Flashcards

1
Q

An investment company with a fixed number of shares that are bought and sold in the secondary securities market

A

Closed-end investment company

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2
Q

A mutual fund; an investment company from which investors buy shares and to which they resell them

A

Open-end investment company

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3
Q

An open-end investment company

A

Mutual fund

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4
Q

The asset value of a share in an investment company; total assets minus total liabilities divided by the number of shares outstanding

A

Net asset value (NAV)

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5
Q

Sales charge levied by mutual funds

A

Load fee

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6
Q

A mutual fund that does not charge a commission for buying and selling its shares

A

No-load mutual fund

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7
Q

A mutual fund that charges a commission to purchase or sell its shares

A

Load fund

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8
Q

Investors who go against the consensus concerning investment strategy

A

Contrarians

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9
Q

A mutual fund whose portfolio seeks to duplicate an index of stock prices

A

Index fund

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10
Q

Mutual funds that specialize in short term securities

A

Money market mutual funds

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11
Q

Short-term securities, such as treasury bills, negotiable certificates of deposit,or commercial paper

A

Money market instruments

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12
Q

Short-term debt of the federal government

A

U.S. treasury bill

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13
Q

A certificate of deposit in which the rate and the term are individually negotiated by the bank and the lender and which may be bought and sold

A

Negotiable certificate of deposit (Jumbo CD)

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14
Q

Time deposit in a foreign bank and denominated in dollars

A

Eurodollar certificate of deposit (Eurodollar CD)

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15
Q

Short-term promissory notes issued by the most creditworthy corporations

A

Commercial paper

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16
Q

Sale of a short-term security in which the seller agrees to buy back the security at a specified price

A

Repurchase agreement

17
Q

Short-term promissory note guaranteed by a bank

A

Bankers acceptance

18
Q

Short-term government security secured by expected tax revenues

A

Tax anticipation note

19
Q

Fees that a mutual fund may charge to cover marketing and advertising expenses

A

12b-1 fees

20
Q

A measure of performance that compares realized return with the return that should have been earned for the amount of risk borne by the investor

A

Jensen performance index (alpha)

21
Q

A risk-adjusted measure of performance that standardizes the return in excess of the risk-free rate by the portfolios systematic risk

A

Treynor performance index

22
Q

A risk-adjusted measure of performance that standardizes the return in excess of the risk-free rate by the standard deviation of the portfolios return

A

Sharpe performance index