Series 66: Exercise

Exercise

Answer the following questions

1. 1. Which statement is true regarding NAV per share?
2. A. NAV is the amount an investor will pay for shares in a mutual fund.
3. B. NAV is used to determine breakpoints.
4. C. NAV is calculated just before the markets open on trading days.
5. D. NAV represents the current value of a mutual fund share.
6. 2. What classes of shares are sold at NAV with no front-end load?
7. I. A shares
8. II. B shares
9. III. C shares
10. IV. D shares
11. A. I and IV
12. B. II and III
13. C. I and III
14. D. III and IV
15. 3. Distribution fees may also be known as:
16. I. Fees paid for marketing and selling fund shares, such as advertising, printing, and mailing
17. II. Front-end fees
18. III. 12b-1 fees
19. IV. Management fees
20. A. II and IV
21. B. I and III
22. C. I and IV
23. D. II and III
24. 4. John purchases a growth fund with a contingent deferred sales charge. Three years later, he has an unfortunate accident and is unable to work. He now needs income to supplement his disability. What do you advise?
25. A. Choose an income or bond fund within the same family of funds, because he will not be charged a new sales charge or be taxed on any gains made on the sale of the growth fund.
26. B. Choose an income or bond fund within the same family of funds, because he will not be charged a new sales charge, but he will be taxed on any gains made on the sale of the growth fund.
27. C. Choose an income or bond fund within the same family of funds; while he will be charged a new sales charge, he will not be taxed on any gains made on the sale of the growth fund.
28. D. It doesn’t matter whether Jon chooses a different fund within the same family or not, because he will still be charged a new sales charge and be taxed on any gains made on the sale of the growth fund.
29. 5. What is the purpose of a letter of inte