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CA Final Mutual Funds — practice questions — page 2

Explore 56 free Mutual Funds questions in CA Final Strategicfinancialmanagement. Open each question or exercise to read its content, reference answers and available explanation.

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Mutual Funds questions and exercises with answers

Showing questions 31–56 of 56.

Which item is normally excluded from the expense ratio?Read the answer and worked solution →A redemption fee usually applies to a sale within what period?Read the answer and worked solution →An investor sells $20,000 of units and a 1% redemption fee applies. What is the fee?Read the answer and worked solution →Unlike a deferred sales load, a redemption fee is paid to whom?Read the answer and worked solution →An exchange fee is imposed when an investor does what?Read the answer and worked solution →An account fee is typically charged on accounts of what kind?Read the answer and worked solution →What defines a no-load fund?Read the answer and worked solution →What is a share class in a mutual fund?Read the answer and worked solution →Which share class usually charges a front-end sales load plus a small distribution and services fee?Read the answer and worked solution →Which share class usually has a high CDSC and a high 12b-1 fee and converts to Class A later?Read the answer and worked solution →Which share class is commonly called 'level load' and usually does not convert?Read the answer and worked solution →Institutional share classes with very high minimum investments are usually labelled what?Read the answer and worked solution →Which share class is usually meant for retirement plans such as 401(k) plans?Read the answer and worked solution →How is net asset value defined?Read the answer and worked solution →A fund has assets of $520 million, liabilities of $20 million and 5 million units. What is NAV per unit?Read the answer and worked solution →A fund holds $90 million of assets, owes $10 million in all, with 4 million units. NAV per unit?Read the answer and worked solution →A fund has total NAV of $200 million and 1 million shares. An investor puts in $40 million. How many shares are issued?Read the answer and worked solution →A fund has NAV of $300 million and 2 million units. How many units does a $30 million investment buy at NAV?Read the answer and worked solution →How many units does a $50,000 investment buy in a no-load fund at NAV of $25?Read the answer and worked solution →How often are a fund's investments valued for NAV?Read the answer and worked solution →What is mismarking in securities valuation?Read the answer and worked solution →How does an ETF share differ from an open-end mutual fund unit?Read the answer and worked solution →Who creates and redeems ETF shares directly with the issuer in large blocks?Read the answer and worked solution →An ETF arbitrage mechanism keeps which two values close?Read the answer and worked solution →Replication in an index ETF means doing what?Read the answer and worked solution →What risk can arise when an ETF tracks assets using futures and swaps?Read the answer and worked solution →

Worked practice questions

Which item is normally excluded from the expense ratio?

  1. Annual management fee
  2. Fund custody charges
  3. Annual audit charges
  4. Front and back-end loads
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Correct answer: D. Front and back-end loads

Loads, securities transaction fees and shareholder transaction fees are normally left out of the ratio.

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A redemption fee usually applies to a sale within what period?

  1. Within 30, 60, or 90 days of purchase
  2. After holding for 10 years
  3. Only on the last trading day of a year
  4. Only after a manager change
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Correct answer: A. Within 30, 60, or 90 days of purchase

Redemption fees target quick sales shortly after buying, usually defined as within 30, 60 or 90 days.

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An investor sells $20,000 of units and a 1% redemption fee applies. What is the fee?

  1. $20
  2. $2,000
  3. $100
  4. $200
Show answer and solution

Correct answer: D. $200

Redemption fees are computed as a percentage of the sale amount, and 1% of 20,000 is 200.

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