Question 1: The Capitalist Mutual Fund's portfolio is valued at $48 million. The fund has liabilities of $4 million, and the investment company sponsoring the fund has issued 1,600,000 shares. What is the fund's net asset value?
- $48.00
- $30.00
- $36.66
- $27.50
- $1
Question 2: A(n) _____ mutual fund is one in which investors pay a commission every time they purchase shares.
- closed-end
- open-end
- no-load
- load
- convertible
Question 3: Mary Cooper just purchased 200 shares in the All-American Fidelity Fund. The purchase cost for each share was $40. If this fund charges a 5% load, what is the total amount of commission she will pay the investment company?
- $10
- $200
- $40
- $400
- It is impossible to calculate Ms. Cooper's total investment with this information.
Question 4: A(n) _____ fund is a mutual fund that invests in stocks issued by companies with a long history of paying dividends.
- balanced
- equity income
- industry
- sector
- money market
Question 5: A mutual fund that invests in the common stocks of companies in the same industry is called a(n) _____ fund.
- growth-income
- income
- sector
- small-cap
- money market
Question 6: According to federal law, an REIT must meet all of the following requirements except
- I it must distribute 90% or more of its taxable annual earnings to shareholders.
- it must hire independent real estate professionals to perform certain management activities.
- it must have at least 100 shareholders, with no more than half of all shares owned by five or fewer people.
- it must directly invest in apartment houses, shopping malls, and other commercial property.
Question 7: Single-family houses are typically expected to observe the following pattern.
- Values tend to rise, providing a possible hedge against inflation.
- Values rise less than the Consumer Price Index.
- Values remain stable in the northern parts of the United States.
- Values tend to rise in New England states, but decline in the South.
- Values remain unchanged in the United States.
Question 8: The real property investment most widely favored by the small investor besides the purchase of a home is
- a Post Office building.
- land.
- a building with 20 apartments.
- a condominium.
- a duplex, fourplex, or small apartment building.
Question 9: An investment in _____ is an example of an indirect real estate investment.
- a single-family home
- a duplex
- an apartment building
- land
- a REIT
Question 10: Owen Cartwright has joined a real estate syndicate that purchased a commercial office building in downtown Seattle, WA. What type of investment does he hold?
- Direct investment in real estate
- Investment in gems
- Investment in precious metals
- Investment in collectibles
- Indirect investment in real estate
Question 11: All of the following are misconceptions about retirement planning except for which?
- My expenses will drop when I retire.
- My retirement will last only 8 years.
- I can depend on Social Security income and Medicare for medical bill payment.
- I can depend on my company pension.
- My savings will still be affected by inflation.
Question 12: The average life expectancy of a woman at age 65 is
- 9 years.
- 16 years.
- 13 years.
- 11 years.
- 19 years.
Question 13: Which statement is regarding retirement living expenses?
- It is impossible to estimate your spending needs.
- Your spending patterns will probably not change.
- You'll use a smaller amount of money for food, housing, and medical care.
- The exact amount of money you'll need is impossible to predict.
- Work-related expenses, such as driving back and forth to work, tend to be lower during retirement.
Question 14: The of division of pensions in a divorce situation primarily depends on the _____.
- length of the divorce period
- husband's generosity
- length of the marriage
- judge's decision
Question 15: When you retire, which one of the following expenditures is likely to decrease?
- Medical expenses
- Insurance expenses
- Clothing expenses
- Expenses for leisure activities
- Gifts and contributions
Question 16: Estate planning involves _____ if a person is married.
- the interest of at least two people
- fewer legal requirements
- fewer financial responsibilities
- seeking the services of a securities broker
- None of the above
Question 17: A person or institution who holds or generally manages property for the benefit of someone else under a trust agreement is called a(n)
- beneficiary.
- executor.
- trustee.
- guardian.
- executrix.
Question 18: If you do not have a valid will when you die, the IRS confiscates your property.
- the federal court decides how the property should be distributed.
- your relatives or friends will get the property.
- your local custom will determine how the property is distributed.
- the state's law of descent and distribution becomes your will.
Question 19: Estate planning opportunities and problems for many people were created by which of the following laws?
- Tax Reform Act of 1986
- Internal Revenue Code of 1954
- Impoundment Control Act of 1974
- Emergency Deficit Control Act of 1985
- Economic Recovery Tax Act of 1981
Question 20: Under a(n) _____, everything will pass to your spouse when you die, with the exception of an amount equal to the exemption, which passes into trust.
- simple will
- traditional marital share will
- exception will
- stated dollar amount will
- exemption trust will