All Courses
Get the App Signup / Login
Sign in Open App
B Com Exam  >  B Com Tests  >  Investing in Stock Markets  >  Test: Types of Mutual Funds - 2 - B Com MCQ

Test: Types of Mutual Funds - 2 - B Com MCQ


Test Description

10 Questions MCQ Test Investing in Stock Markets - Test: Types of Mutual Funds - 2

Test: Types of Mutual Funds - 2 for B Com 2024 is part of Investing in Stock Markets preparation. The Test: Types of Mutual Funds - 2 questions and answers have been prepared according to the B Com exam syllabus.The Test: Types of Mutual Funds - 2 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Types of Mutual Funds - 2 below.
Solutions of Test: Types of Mutual Funds - 2 questions in English are available as part of our Investing in Stock Markets for B Com & Test: Types of Mutual Funds - 2 solutions in Hindi for Investing in Stock Markets course. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free. Attempt Test: Types of Mutual Funds - 2 | 10 questions in 10 minutes | Mock test for B Com preparation | Free important questions MCQ to study Investing in Stock Markets for B Com Exam | Download free PDF with solutions
Test: Types of Mutual Funds - 2 - Question 1
Save

What is the main characteristic of hybrid funds?

Detailed Solution for Test: Types of Mutual Funds - 2 - Question 1
Hybrid funds, also known as balanced funds or asset allocation funds, provide a combination of more than one underlying investment asset class, such as stocks, bonds, or cash. This allows investors to diversify their portfolio and potentially benefit from different market conditions. Unlike funds that focus on a single asset class, hybrid funds offer a mix of investments.
Test: Types of Mutual Funds - 2 - Question 2
Save

Which type of hybrid fund has a fixed asset allocation?

Detailed Solution for Test: Types of Mutual Funds - 2 - Question 2
Balanced funds, which are a type of hybrid fund, have a fixed asset allocation. This means that the fund maintains a consistent mix of stocks, bonds, and cash over time. The asset allocation is typically classified as conservative, moderate, or aggressive, depending on the level of risk the fund aims to take. Balanced funds are suitable for investors looking for a stable and balanced approach to investing.
1 Crore+ students have signed up on EduRev. Have you? Download the App
Test: Types of Mutual Funds - 2 - Question 3
Save

Which fund is an example of a moderate allocation balanced fund?

Detailed Solution for Test: Types of Mutual Funds - 2 - Question 3
Fidelity Balanced (FBALX) is an example of a moderate allocation balanced fund. This fund typically has an asset allocation of approximately 65% stocks and 35% bonds. It aims to provide a balanced approach to investing, with a moderate level of risk. Fidelity Balanced is one of the best moderate allocation balanced funds available.
Test: Types of Mutual Funds - 2 - Question 4
Save
What is the purpose of target-date funds?
Detailed Solution for Test: Types of Mutual Funds - 2 - Question 4
Target-date funds are designed to align with an investor's retirement timeline. The investor chooses a target date, which is the year closest to their intended retirement, and the fund adjusts its asset allocation accordingly. Initially, the fund may have a higher allocation to stocks for long-term growth potential. However, as the target date approaches, the fund gradually shifts towards more conservative investments, such as bonds, to reduce risk. Target-date funds are commonly used for retirement saving and investing.
Test: Types of Mutual Funds - 2 - Question 5
Save
What is the primary benefit of hybrid funds?
Detailed Solution for Test: Types of Mutual Funds - 2 - Question 5
The primary benefit of hybrid funds is the ability to diversify with just one mutual fund. By investing in a combination of different asset classes, such as stocks, bonds, and cash, hybrid funds offer built-in diversification. This can help spread risk and potentially enhance returns. Rather than investing in multiple funds to achieve diversification, investors can achieve it with a single hybrid fund.
Test: Types of Mutual Funds - 2 - Question 6
Save
What is the purpose of money market mutual funds for investors?
Detailed Solution for Test: Types of Mutual Funds - 2 - Question 6
The purpose of money market mutual funds for investors is to earn interest on cash reserves. Money market mutual funds offer a convenient and low-risk option for investors to park their cash reserves. These funds invest in short-term, high-quality, and low-risk securities, such as Treasury bills, commercial paper, and certificates of deposit. By investing in money market mutual funds, investors can earn a modest return on their cash while maintaining liquidity and safety.
Test: Types of Mutual Funds - 2 - Question 7
Save
When are money market mutual funds particularly suitable investments?
Detailed Solution for Test: Types of Mutual Funds - 2 - Question 7
Money market mutual funds are particularly suitable investments when an investor needs a convenient place for cash reserves. These funds offer ultimate safety and liquidity, allowing investors to have access to their cash when needed. Money market mutual funds serve as a parking place for cash reserves, providing a secure and easily accessible option for investors who are not ready to make an investment or have near-term cash outlays for non-investment purposes.
Test: Types of Mutual Funds - 2 - Question 8
Save
What are some operational details of money market mutual funds?
Detailed Solution for Test: Types of Mutual Funds - 2 - Question 8
Money market mutual funds allow investors to withdraw assets by writing checks, usually of a minimum amount around $500 per check. This feature provides investors with easy access to their cash reserves when needed. Unlike traditional savings accounts, money market funds offer the potential for slightly higher returns while still maintaining liquidity and safety. They are a popular choice for investors looking for a low-risk and easily accessible option for their cash.
Test: Types of Mutual Funds - 2 - Question 9
Save
What are the categories of money market mutual funds based on their taxable or tax-exempt status?
Detailed Solution for Test: Types of Mutual Funds - 2 - Question 9
The categories of money market mutual funds are based on their taxable or tax-exempt status. Taxable funds invest in securities such as Treasury bills and commercial paper, whose interest income is subject to federal taxation. On the other hand, tax-exempt funds invest exclusively in securities issued by state and local governments, which are exempt from federal taxation. Tax-exempt funds are particularly appealing to investors in higher federal tax brackets who are seeking tax savings on the interest income generated by their portfolios.
Test: Types of Mutual Funds - 2 - Question 10
Save
What is the primary factor affecting mutual fund performance?
Detailed Solution for Test: Types of Mutual Funds - 2 - Question 10
The primary factor affecting mutual fund performance is the change in the value of its holdings. As the prices of the investments in the fund's portfolio rise or fall, the value of the fund's shares also changes. This change in value directly impacts the performance of the fund. The fund manager's ability to select and manage the investments plays a significant role in determining the fund's performance. Other factors, such as cash flows and expenses, can also influence performance but are secondary to the performance of the fund's holdings.
36 videos|37 docs|11 tests
Join Course
Information about Test: Types of Mutual Funds - 2 Page
In this test you can find the Exam questions for Test: Types of Mutual Funds - 2 solved & explained in the simplest way possible. Besides giving Questions and answers for Test: Types of Mutual Funds - 2, EduRev gives you an ample number of Online tests for practice
36 videos|37 docs|11 tests
Join Course
Download as PDF

Important Questions for Types of Mutual Funds - 2

Find all the important questions for Types of Mutual Funds - 2 at EduRev.Get fully prepared for Types of Mutual Funds - 2 with EduRev's comprehensive question bank and test resources. Our platform offers a diverse range of question papers covering various topics within the Types of Mutual Funds - 2 syllabus. Whether you need to review specific subjects or assess your overall readiness, EduRev has you covered. The questions are designed to challenge you and help you gain confidence in tackling the actual exam. Maximize your chances of success by utilizing EduRev's extensive collection of Types of Mutual Funds - 2 resources.

Types of Mutual Funds - 2 MCQs with Answers

Prepare for the Types of Mutual Funds - 2 within the B Com exam with comprehensive MCQs and answers at EduRev. Our platform offers a wide range of practice papers, question papers, and mock tests to familiarize you with the exam pattern and syllabus. Access the best books, study materials, and notes curated by toppers to enhance your preparation. Stay updated with the exam date and receive expert preparation tips and paper analysis. Visit EduRev's official website today and access a wealth of videos and coaching resources to excel in your exam.

Online Tests for Types of Mutual Funds - 2 Investing in Stock Markets

Practice with a wide array of question papers that follow the exam pattern and syllabus. Our platform offers a user-friendly interface, allowing you to track your progress and identify areas for improvement. Access detailed solutions and explanations for each test to enhance your understanding of concepts. With EduRev's Online Tests, you can build confidence, boost your performance, and ace Types of Mutual Funds - 2 with ease. Join thousands of successful students who have benefited from our trusted online resources.
© EduRev
Education Revolution
Follow Us
Signup to see your scores go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup