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