When You Buy a Mutual Fund,you Own ________

question 15

Multiple Choice

When you buy a mutual fund,you own ________.

• A)the individual stock directly
• B)shares of a fund that owns the assets
• C)stock in the mutual fund company
• D)stocks and bonds

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Definitions:

Supernormal Dividend

Dividends that are higher than the level that can be sustained by the long-term growth rate of the company.

Common Stock

Equity ownership in a corporation, with voting rights and potentially variable dividends.

Sinking Fund Provisions

A requirement that a borrower regularly set aside funds to repay a debt before or at maturity, often used in conjunction with bonds.

Bond Indenture

The formal agreement between a bond issuer and bondholders, detailing the terms of the bond such as interest rates, maturity date, and other conditions.