Quiz 3.7-3.8 Funds and Investing

Which type of investment fund can be traded throughout the trading day?

• Mutual Funds

• Target Date Funds

• Exchange-Traded Funds (ETFs)

• Index Funds

What is a key characteristic of Target Date Funds (TDFs)?

• They can only be traded during specific hours

• They are exclusively passively managed

• They require high minimum investments

• They are considered "set-it-and-forget-it" investments

Which investment type typically has the lowest expense ratios?

• Actively managed mutual funds

• Target Date Funds

• Exchange-Traded Funds

• Index Funds

How are traditional mutual fund transactions processed?

• Instantly during market hours

• Based on Net Asset Value at day's end

• Only during morning trading hours

• Through instant market pricing

What makes ETFs unique in terms of initial investment?

• They require high minimum investments

• They can only be purchased in whole shares

• They offer fractional shares for as little as one dollar

• They have fixed minimum investment requirements

Which type of fund is typically actively managed and comes with higher fees?

• Traditional Mutual Funds

• Index Funds

• ETFs

• Target Date Funds

How do investors potentially make money from all these fund types?

• Only through price appreciation

• Only through dividend payments

• Through interest payments only

• Through both price appreciation and distributions

What is the management style of Index Funds?

• Both active and passive

• Actively managed only

• Passively managed

• Variable management

Which fund type typically requires the highest minimum initial investment?

• ETFs

• Target Date Funds

• Index Funds

• All have similar requirements

What is a potential additional cost when purchasing mutual funds through a financial advisor?

• Monthly maintenance fees

• Sales loads

• Trading commissions

• Account closure fees