Hector Purchased a Fund That Had an Asset Allocation of 40

question 45

Multiple Choice

Hector purchased a fund that had an asset allocation of 40% debt and 60% equity. Hector bought the fund at a 10% discount from NAV. Hector purchased:

• A) an equity, load fund.
• B) a balanced, closed-end fund.
• C) a balanced, load fund.
• D) a large-cap, blend, load fund.

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Definitions:

Income

The cash flow generated out of work or investments, typically on a steady basis.

Utility Function

A mathematical representation of a consumer's preference ranking over bundles of goods, showing the level of satisfaction or utility derived.

Commodity

A basic good used in commerce that is interchangeable with other goods of the same type; commodities are often used as inputs in the production of other goods or services.

Income

Earnings garnered from employment or investing, often received periodically.