To Determine the Actual Objective of a Fund, You Should

question 98

Multiple Choice

To determine the actual objective of a fund, you should primarily refer to the:

• A)fund's objective statement.
• B)fund's prospectus.
• C)portfolio holdings.
• D)sales literature.
• E)portfolio manager's comments in the annual report.

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Definitions:

Capital Lease

A capital lease is a lease agreement where the lessee receives ownership rights over the asset, for accounting purposes, similar to a purchase financed through a loan.

Economic Life

The duration over which an asset is expected to be economically usable, with its cost being justified by its performance.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, reflecting the time value of money.

Investment Tax Credit

A tax credit offered to entities to encourage investment in certain assets, offering a reduction in tax liability.