A mutual fund that does not charge a commission or sales charge is called an open-end fund.
T F
2. Alternative investment means putting your investment dollars in different companies, industries, and
asset classes.
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3. Asset allocation is the process of determining what percentage of your investment portfolio should be put
into different asset classes, such as cash, stocks, and bonds.
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4. The terms "bear" and "bull" are used to describe how investors see the "ups" and "downs" of the stock
market.
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5. The Securities Exchange Commission is a regulatory organization created to protect US investors by
maintaining fair markets.
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Part 2: Multiple Choice
Answer the following by selecting the letter in front of the correct response.
6. A managed collection of cash, stocks, bonds, and other securities is known as a
a. Mutual fund
b. Money market fund
c. No-load fund
d. Closed-end fund
7. What is an example of an alternate investment?
a. Hedge funds
b. Real estate
c. Collectibles
d. All of the above

Chapter 17 Diversifying Dollars
Chapter Assessment

Chapter 17 Assessment Page 2 of 4 Personal Finance for Teens
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8. Which of the following is NOT an equity fund?
a. Growth funds
b. Sector funds
c. Index funds
d. Balanced funds
9. Basic economic indicators used by economists, financial advisors, investors, and government officials are
a. Gross Domestic Product
b. Consumer Confidence Index
c. Consumer Price Index
d. All of the above
10. A mutual fund that only issues a certain number of shares and no new ones as investor demand grows is
called a
a. Fixed income fund
b. Closed-end fund
c. Balanced fund
d. No-load fund

1. False

2. False

3. True

4. true

5. True

6. A mutual fund

7. D. all of the above

8. d. Balanced funds

9. D. all of the above

10. Closed-end fund

Explanation:

1. A mutual fund that does not charge a commission or sales charge is called a  Load fund.

Open end fund is a type of fund that operates on massively diversified pollinator and able to issue as much shares as it wants. It can still charge a commission or sales charge.

2. Alternative investment basically include any form of investment beside stocks, bonds, and cash.

Even if you invest in different companies or industries, as long as its in stocks , bonds, or cash that investment couldn't be considered as an alternative investment.

3. Asset allocation is being done in order to minimize the risk of investment. Separating your investment portfolio in different classes will protect your wealth in case any of the investment failed.

I will use egg basket scenario to explain this.

If you purchase a lot of eggs and put it into one basket, all of your eggs will be cracked in case that one basket fall.

But, if you separate those eggs and allocate it into different basket, you'll still have a lot of eggs left in case one basket fall.

4. Bear is the term that is used by investors when they believe that the stock market is on the decline (more sellers than buyers in the market).

Bull on the other hand is the term that is used to describe a market situation when it's going up (more buyers than sellers). This period usually lead to high profit among investors.

5. The Securities Exchange Commission was created to ensure that companies do not conduct any unfair practices that might negatively influence the investors. The commission ensure that the company will be held accountable for the financial information they provide to the investors along with ensuring that there's no inside trading going on within the company.

6. Large capital usually translated to higher amount of profit.

But for most people, gathering large enough capital to earn that profit is impossible. Mutual funds basically gathered relatively small amount of money from sever people and invest the accumulated amount under one management. They spread their investment in various things including cash, stocks, bonds, or other security in order to minimize their risk.

7. Alternative investment basically include any form of investment beside stocks, bonds, and cash.

Hedge Funds (funds which focused on high risk assets) , Real Estates (such as houses and lands) , and collectibles (such as historical antiques) are the things you can purchase and the value will most likely increase in the future. This is why they can be considered as alternative investment.

8. Equity fund is the type of fund that focus its transaction in stock.

Balanced funds on the other hand, usually separated its transaction into different assets. They're not focused on stock alone. They can purchase other securities such as bonds or even money market.

9. All of them usually used by experts.

Gross Domestic product usually used to measure average productivity that the country able to achieve within a year.

Consumer Confidence Index usually used to measure the feeling of safety that the people have toward their saving and spending amount.

Consumer price index usually used to measure the average prices of goods and services from different industries.

10. In order to create a closed-end fund, a mutual fund need to conduct an initial public offering.In this process, they will specifically listed the amount of shares that they willing to trade in the market

Typically, closed-end fund will provide higher profit percentage compared to others that have unlimited number of shares. But it's extremely volatile and tend to be harder to liquidate.

answer; enforce the rules;