5-68 as a Result of Illegal and Abusive Activities in Recent

question 88

Multiple Choice

5-68 As a result of illegal and abusive activities in recent years,new rules and regulations were imposed on mutual fund companies in 2004.These rules were intended to

• A)close legal loopholes that some fund managers had abused.
• B)improve fund governance.
• C)give investors more information about conflicts of interest.
• D)ensure the accuracy of information given to regulators.
• E)All of the above.

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Definitions:

Ending Equity

The value of an owner's interest in a property or a business at the end of an accounting period after all debts have been subtracted.

Retained Earnings

A portion of company profits not paid out as dividends but reinvested in the business, used for debt payment, or saved as cash reserves.

Profits

The financial gain obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to maintain the operation.

Re-Invested

Capital or earnings that are put back into a business or investment to support growth or generate additional revenue.