Which of the following bonds will experience the greatest percentage change in price for a given change in interest rates?
Answer(s): B
The bond that will experience the greatest percentage change in price for a given change in interest rates is the bond with 10 years to maturity that pays a 5% coupon. Bonds with longer durations experience greater changes in price, and the long maturity, low coupon bonds have longer durations.
After three warnings, Honest Investments was forced to terminate Sly Conman, one of its representatives, for making inaccurate statements when offering its mutual fund products to customers. Given this scenario:
When Honest Investments terminates Mr. Conman, the firm must provide FINRA with an electronic notification of the termination within 30 days and provide a written copy of the submitted form to Mr. Conman within that same period of time.
Doc purchased shares of the MedTech Fund at its net asset value of $9.66 a share at the beginning of the year. The fund distributed dividends of $0.12 a share and capital gains of $0.10 a share during the year.The net asset value at the end of the year was $12.00. The fund's total return was:
The fund's beginning NAV was $9.66, its ending NAV was $12.00, and its distributions during the year totaled $0.22 a share, so the total return on the MedTech Fund over this period was 26.5%. Total return can be calculated as:[(ending NAV + distributions) - beginning NAV]/beginning NAV = [($12.00 + $0.22) - $9.66]/$9.66 = 26.5%.
Which of the following investor characteristics is inconsistent with an aggressive investment strategy?I). short investment horizonII). high risk toleranceIII). young
Answer(s): C
The investor characteristic that is inconsistent with an aggressive investment strategy is a short investment horizon. The shorter the investment horizon, the less aggressive the investment strategy should be, all else equal, because a shorter investment horizon means the investor has less opportunity to ride the up-and-down waves of the market.
The difference between a "redemption fee" and a "rear-end load" is that:
The difference between a "redemption fee" and a "rear-end load" is that a rear-end load is used to compensate a salesperson who has sold shares of the fund, while a redemption fee is charged to offset the expenses a fund incurs in processing share redemptions.
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