Chap 13 Flashcards
Pools the money investors-it’s shareholders-to invest in a variety of securities
Mutual fund
A mutual fund whose shares are issued by an investment company only when the fund is organized
Close-end fund
A fund that invests in the stocks or other securities contained in a specific stock or securities index and whose shares are traded on a securities exchange or over the counter
Exchange-traded fund (ETF)
A mutual fund whose shares are issued and redeemed by the investment company at the request of investors
Open end fund
The current market value of the securities contained in the mutual funds portfolio minus the mutual funds liabilities divided by the number of shares outstanding
Net asset value (NAV)
A mutual fund in which investors pay a commission (as high as 8.5%) every time they purchase shares
Load fund
A mutual fund in which the individual investor pays no sales charge
No load fund
A 1 to 5 percent charge that shareholders pay when they sell shares in a mutual fund
Contingent deferred sales load
A fee that an investment company levies to defray the costs of advertising and marketing a mutual fund
12b-1 fee
The amount that investors pay for all of a mutual funds management fees and operating costs
Expense ratio
A group of mutual funds managed by one investment company
Family of funds
The earnings a fund pays to shareholders from its dividend and interest income
Income dividends
The payments made to a funds shareholders that result from the sale of securities in the funds portfolio
Capital gain distributions
A ratio that measures the percentage of a funds holdings that have changed or “been replaced” during a 12-month period of time
Turnover ratio
A service provided by an investment company in which shareholder income dividends and capital gain distributions are automatically reinvested to purchase additional shares of the fund
Reinvestment plan
