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Definition
| A group of investors with similar goals pool their money in order to invest in a portfolio of securities. They share in the profits or losses that the portfolio produces. |
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Definition
| Allows the investors to reduce their risk by spreading their money among many different investments. |
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Definition
| The ability to sell an asset at a reasonable price within a short period of time. |
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Term
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Definition
| The total value of all the net assets (assets minus liabilities) in the fund's portfolio divided by the number of tis outstanding shares. |
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Term
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Definition
This fund must meet criteria established by the 1940 Act. 75% of the assets had to be invested according to the following:
-Could not own more than 10% of any one company's voting stock
-No more than 5% of its total assets could be invested in the securities of any one company
-The remaining 25% could be invested however. |
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Definition
| A requirement of the SEC for companies with more than 100 shareholders. |
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Term
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Definition
| It contains the information that the SEC considers crucial for an investor to have. Any offer to sell the fund's shares must either be proceeded by or accompanied by it. |
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Term
| The following is included in a Prospectus: |
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Definition
- Investment Objectives
- Investment policies and restrictions
-Principal risks of investing in the fund
- Performance Information
- The fund's managers
- Operating Expenses
- Sales Charges
- Classes of shares the fund offers
- Breakpoints
- How the fund's NAV is calculated
- How investors redeem or purchase shares
- Exchange privileges |
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Term
| The Statement of Additional Information |
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Definition
| Proveds more detailed information about the fund and its investment policies and risks. Unlike the prospectus, this does not need to be given to anyone, but only those who request it. |
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Term
Mutual funds offer investors all of the following EXCEPT:
a. Professional Management
b. Tax Deferral
c. Diversification
d. Convenience |
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Definition
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Term
| A registered rep who is trying to sell mutual funds to clients must give the a current prospectus: |
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Definition
| At the time the rep first offers the shares to clients or prior to when the rep first offers the shares to the clients. |
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Term
| An open-end investment company: |
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Definition
| This type of company continuously offers new shares to the public. |
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Term
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Definition
| This group of people is responsilbe for running the fund for the benefit of the shareholders. |
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Term
| The board does the following: |
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Definition
-Appoints principal officers
-Selects the fund's custodian, transfer agent, and principal underwriter. |
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Term
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Definition
| Are people who do not have inherent interest in the fund. They many not work for the fund, its investment adviser, its underwriter, or any affiliated company. |
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Term
| Unless a majority of the outstanding shares agree, the board of directors may not: |
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Definition
1. Change the fund's investment objectives or policies.
2. Change the fund from diversified to non-diversified.
3. Stop being an investment company. |
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Term
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Definition
| These semiannual and annual reports give the shareholders the most current information about the fund's financies. They include the fund's most recent balance sheet and income statement. |
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Term
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Definition
| A snapshot of the company's financial position at a particular point in time. It lists the company's assets and liablities. |
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Term
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Definition
| This person manages the fund's portfolio in accordance with its investment objectives and policies established by its board of directors. They research and analyze financial and economic trends and then decides which securities the fund should buy or sell in order to maximize its performance. They must have a written contract with the firm. |
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Term
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Definition
| This entity is responsible for safeguarding the fund's cash and securities and collecting dividend and interest payments from these securities. It does not guaranteed the fund's shareholders against investment losses, nor does it sell shares to the public. |
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Term
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Definition
| This person performs a number of record-keeping functions for the fund. It issues new shares and cancels the ones that the investors have redeemed. It also distributes capital gains and income dividends to the fund's shareholders. |
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Term
| Principal Underwriter (Distributor) |
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Definition
| These are used to sell shares to the public. |
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Term
A fund's investment adviser has complete discretion to manage the fund's portfolio any way as long as the fund out performs the Dow Jones Industrial average.
True or False? |
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Definition
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Term
| A custondian's main function is to: |
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Definition
| Preserve the fund's physical assets |
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Term
| Where would the best source of information be about the Benedict Arnold Growth Fund's current holdings? |
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Definition
| The fund's annual report. |
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Term
| 3 Types of Investment Companies: |
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Definition
1. Face-Amount Certificate Companies
2. Unit Investment Trusts
3. Management Companies |
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Term
| Face-Amount Certificate Companies |
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Definition
| This type of investment company issues debt certificates that pay a predetermined rate of interest. Investors purchase these in periodic installments or by depositing a lump sum. |
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Term
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Definition
| A lesser amount received by an investor if they cash in therir certificates before they mature. |
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Term
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Definition
| A type of investment company that are formed under a legal document (indenture). They have trustees instead of a board of directors. They invest in a fixed portfolio of income-producing securities like stocks or bonds. |
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Term
| Closed-End Investment Companies |
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Definition
| A type of management company that only issues stock to the public once and do not stand ready to redeem their shares for cash. Price is determined by market and shares are traded in the secondary market. |
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