Business chapter 14

Individuals can buy shares in a mutual fund

True

Most mutual fund companies offer several different types of funds

True

With mutual funds, you must make a large initial payment of $10,000 or more, together with monthly payments of $500 or more.

False

Growth funds are usually considered high risk of loss but also offer a chance for high returns

False

Aggressive growth funds are considered high risk of loss but also offer a chance for high returns

True

Index funds hold stocks and bonds that react in the same way as the stock or bond markets as a whole

True

By law, investment companies must provide a prospectus for each fund offered

True

A no-load fund does not charge a sales commission

True

The internet is not a good place to find information on mutual funds

False

Leverage is the use of borrowed money to make an investment

True

Agreements to buy commodities at specified prices on specified dates are called

Futures contract

Contracts to buy and sell something for a specified price in the future are

Collectibles

What fund attempts to reduce risk by investing in a mixture of stocks and bonds

Balanced fund

What fund invests in safe, liquid securities with little risk

Money market

What fund charges a commission when you sell your shares

Back-end load

Occurs when money is left over after expenses are paid

Positive cash flow

A variety of funds covering a wide range of objectives

Family of funds

A fund that buys stocks that should increase in price over time

Growth fund

A corporation that pools money to invest in real estate

REIT

A fund that specializes in income-producing securities

Income fund