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NEW QUESTION: 1
Which of the following is not a potential advantage associated with investing through a mutual fund?
A. lower cost associated with portfolio management
B. diversification
C. price discovery
D. simplified recordkeeping
Answer: C
Explanation:
Explanation/Reference:
Explanation: Price discovery is not a potential advantage associated with investing through a mutual fund.
The net asset value of the fund determines its price, not the interaction of buyers and sellers in the market.
All the other choices are advantages of investing through a mutual fund.
NEW QUESTION: 2
HiTop Investments main office is located in the state of Colorado. A registered representative of the firm
sent out an e-mail to his clients, some of whom reside in other states, promoting the firm's Colorado
Municipal Bond Fund, which invests exclusively in bonds offered by the state and local governments of
Colorado. In the e-mail, the representative states, "These bonds provide income that is free from both
federal and state taxes and may also be free from local taxation, if any exists." Is this e-mail in violation of
any securities' laws?
A. Yes. A fund that invests only in bonds offered by state and local governments of one state may not be
sold to investors who reside in other states.
B. Yes. Advertisements referring to a specific fund may not be distributed by electronic means.
C. Yes. The representative's statement that the "bonds provide income that is free from both federal and
state taxes and may also be free from local taxation, if any exists," is untrue.
D. No. Since the fund invests exclusively in bonds offered by the state and local governments of Colorado,
the representative's statement contains no misstatement of fact.
Answer: C
Explanation:
Yes, the e-mail is in violation of the Securities Act of 1933 because the representative's
statement that the "bonds provide income that is free from both federal and state taxes and may also be
free from local taxation, if any exists," is an untrue statement of a material fact. Although the income will
be free from federal taxation, residents of states other than Colorado will likely be required to pay state
and local income taxes on the interest earned. It is not illegal to sell municipal bonds to investors in other
states or to distribute advertisements by electronic means.
NEW QUESTION: 3
If q is decreased by p percent, then the value of q is now
A. Option E
B. Option D
C. Option B
D. Option A
E. Option C
Answer: B
Explanation:
Explanation/Reference:
P percent of q is equal to q(p/100)or If is decreased by this amount, then the value of q is
less than q, or qpq/100