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15) What would be the tax consequence of owning a mutual fund that made distributions of $600
resulting from short-term capital gains and $800 resulting from long-term capital gains assuming
a 30% tax bracket and a 10% capital gains rate?
A) $420
B) $140
C) $300
D) $260
Answer: D
Explanation: D)
Short-term gains $600 × 0.30 = $180
Long-term gains $800 × 0.10 = $80
Total tax consequence $260
Diff: 2
Question Status: Revised
16) If a mutual fund's performance is the result of conditions in the general stock market, the
fund is being affected by the ________ risk.
Answer: market
Diff: 1
Question Status: Revised
17) List the following four types of medium-term bond mutual funds in order from the lowest
default risk to the highest: Ginnie Mae, corporate, high-yield, Treasury.
Answer: Treasury, Ginnie Mae, corporate, high-yield.
Diff: 2
Question Status: Revised
18) Arrange the following five bond funds in order from the lowest return and risk to the highest:
long-term global, short-term Treasury, intermediate-term corporate, long-term high-yield, long-
term Ginnie Mae.
Answer: short-term Treasury, intermediate-term corporate, long-term Ginnie Mae, long-term
high-yield, long-term global.
Diff: 2
Question Status: Revised
19) Arrange the following five stock funds in order from the highest risk to the lowest: index
fund, capital appreciation fund, technology sector fund, income fund, growth stock fund.
Answer: technology sector fund, capital appreciation fund, growth stock fund, income fund,
index fund.
Diff: 2
Question Status: Revised