Investment Funds

Mutual funds and unit investment funds have become popular vehicles for many investors. How well do you know these investment terms?

1. Accrual n. a method that calculates a fund’s Net Asset Value based on – A: a very mean fund manager. B: the current market price of its securities. C: the future market price of its securities. D: the purchase or cost price of its assets.

2. Fixed income n. – A: the monthly salary of the fund manager. B: the regular income earned by the fund. C: securities that have a stated return and maturity value. D: securities that have a regular monthly income.

3. Maturity n. – A: date on which a security is due to be repaid. B: a security that has a long duration. C: the long professional experience of the fund manager. D: an aging process.

4. Coupon n. – A: a discount on the purchase price of a security. B: current interest rate for a fixed income security. C: the certificate that identifies the ownership of shares or units in a fund. D: a piece of a paper for claiming discounts at the grocery.

5. Actively managed adj. describes a fund where the fund manager – A: who is always working. B: actively invests in securities to beat a benchmark. C: actively invests in securities to track or mirror a benchmark. D: uses computer models to invest in securities.

6. Bond n. – A: 007. B: a guarantee given by the fund manager. C: a deposit made by an investor. D:  a certificate of indebtedness issued by a corporation or government.

7. Launch date n. – A: a popular noontime show in the 80s. B: date when the fund was incorporated. C: date when a new fund is introduced to the public. D: date when a new fund manager is introduced to the public.

8. Redemption n. – A: process of withdrawing or selling back shares or units in a fund. B: process of selling the securities of a fund. C: validation for a fund manager previously deemed a failure. D: growth of a fund after a period of negative returns.

9. Marked-to-market adj. valuation method where a fund’s assets are valued at the – A: purchase price. B: current price. C: future price. D: discounted price.

10. Net Asset Value n. – A: market price of a fund. B: net income earned by a fund. C: total assets of a fund. D: net worth of the assets of a fund.


1. D 2. C 3. A 4. B 5. B 6. D 7. C 8. A 9. B. 10. D

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