Series 7: Exercise

Exercise

Choose which type of communication is being delivered.

1. A. Generic advertisement
2. B. Omitting prospectus
3. C. Summary prospectus
4. D. Statutory prospectus
5. 1. _____ A complete description of a mutual fund, including a summary in plain English, is published on the fund’s website, where investors can access it.
6. 2. _____ A mutual fund puts out a pamphlet explaining what mutual funds are and why an investor might be interested in one. It doesn’t mention the company or its products by name. It does provide a phone number for the company and invites the reader to call for more information.
7. 3. _____ A mutual fund takes out a magazine ad that includes a statement advising the reader to consider the fund’s investment objectives, risks, and charges and expenses carefully before investing.
8. 4. _____ An investor wishes to buy shares in a mutual fund. Prior to her purchase, the fund sends her a description of the fund in plain English, with the web address of a complete and up-to-date prospectus.

Answer the following questions.

1. 5. A mutual fund omitting prospectus must include which of the following:
2. A. A summary in plain English of the mutual fund’s statutory prospectus
3. B. Generic information about types of investment companies
4. C. A statement advising an investor to carefully consider the fund’s investment objectives, risks, and charges/expenses
5. D. A fee table, with an example that illustrates the costs of investing in the fund
6. 6. A mutual fund’s summary prospectus must be a copy of:
7. A. The cautionary statements used in the mutual fund’s omitting prospectuses
8. B. The summary in plain English that must be included in the mutual fund’s statutory prospectus
9. C. The mutual fund shares’ SEC registration form
10. D. The legend used by the mutual fund for advertisements that include performance data
11. 7.&#