Which of the Following Funds Would Be the Most Appropriate

question 16

Multiple Choice

Which of the following funds would be the most appropriate investment for the average small investor?

• A)No-load open-end fund
• B)No-load closed-end fund
• C)Front-end load fund
• D)Back-end load fund

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Definitions:

Payout Ratio

The proportion of earnings paid out as dividends to shareholders, typically expressed as a percentage of the company's total net income.

Current Dividends

Dividends that are declared and paid to shareholders out of a company's current earnings or accumulated profits.

Future Dividends

Expected payments made by a corporation to its shareholder members based on future earnings, typically projected by the company’s management or analysts.

Target Payout Ratio

A goal set by a company to distribute a certain percentage of earnings to its shareholders in the form of dividends.