Part 1 Practice Test Questions-Based On Facts Flashcards
The first ETF began in ___
1993 or 1995 if you ask IBF
a mutual fund’s financial highlights table contains information for the past ___.
10 years or less if the mutual fund is younger
Today, the average equity REIT has a ____ return correlation with the S&P 500.
moderately positive correlation (between .5-.7 appx)
FINRA does not permit mutual fund sales loads to exceed ___.
8.5%
Mutual funds generally list only their top ___ holdings.
10
Equities include which of the following (1) stocks, (2) commodities, (3) collectibles, and/or (4) real estate.
Only stocks and real estate if in REITs
Over the past 90-100 years-if the S&P 500 has averaged about 10% a year, how much of the 10% annualized return can be attributed to dividends?
about 40% … at least that’s possible to be deduced from p. 9
The vast majority of mutual fund sources use ___ to report fund turnover.
simple average turnover rate
Current SEC rules require that independent mutual fund board members make up at least ___ of the board.
40%
A fund’s turnover ratio is calculated by taking the ___ purchases or sales, and dividing that number by average ___ net assets.
lesser of; monthly
In 1981, the prime interest rate in the U.S. peaked at ___. This was the highest rate seen in the past ___ years.
21.5%; 100
The P/E for a stock is computed by dividing the price of a stock (the “P”) by the company’s annual earnings per share (the “E”). If a stock is trading at $20 per share and its earnings per share are $1, then the stock has a P/E of ___
20 ($20/$1).
A financial writer (Kopcke) found average annual trading costs for the lowest quintile of funds with the lowest costs to be ___ of assets annually.
.11%
The current price per square foot for U.S. homes for sale is roughly ___.
$233 according to Rocket Mortgage, but no options on practice test are close to this as of 10/28/24
From its then October 2007 peak to its March 2009 trough, the S&P 500 lost ___.
51% according to Practice test options … but closer to the mid/high 50s according to other sources.
Average annual turnover for EQUITY funds is approximately ___.
100%
There are 6 possible 1-time fees for a mutual fund.
1) ___ sales charge/load on purchases
2) ____ sales charge (charged for redeeming shares before a certain point)
3) ____ fee (these are capped at 2% and meant to make sure brokers get paid)
4) ___ fee (generic fee to defer costs for the fund)
5) ___ fee (charged for shareholders transferring to a fund within the same family; usually around $5-$10)
6) ___ fee ($10-$25 per year usually for shareholders having below a certain amount in a fund)
1) Front end
2) Back end/Deferred
3) Redemption
4) Purchase
5) Exchange
6) Account
Over the past 90+ years, the stock market’s P/B ratio has ranged from ___.
< 1 to 8
___ is unique among all mutual fund families because any and all profit goes right back to its shareholders (fund investors).
Vanguard
There are 3 broad categories of REITs.
1) ___ REITs are composed of income-producing real estate
2) ___ REITs tend to be more leveraged.
3) ___ REITs are self-explanatory.
1) Equity
2) Mortgage
3) Hybrid
A mutual fund’s financial highlights table can be found in the ___
prospectus
From 1926-2019, $1 inflated to ___.
$14.44 according to Fed … or $15 on test.
Excluding the fund itself, where else can you download a fund’s SAI?
EDGAR-the SEC’s Electronic Data Gathering And Retrieval system
From 1972-2018, $10,000 invested in the S&P 500 or equity REITs grew to ___.
$2.2 million plus
