In an Economy in Which Decisions Are Guided by Prices

question 21

Multiple Choice

In an economy in which decisions are guided by prices and individual self-interest,there is

• A)the potential to achieve efficiency in production.
• B)a strong need for government intervention in the market.
• C)less efficiency than would be observed in a centrally-planned economy.
• D)more need for a strong legal system to control individual greed than would be needed in a centrally-planned economy.

Understand the calculation of net asset value (NAV) and how it affects mutual fund transactions.

Recognize the tax implications and potential tax liabilities associated with investing in mutual funds.

Differentiate between open-end and closed-end funds as well as exchange-traded funds (ETFs).

Understand the regulatory requirements and disclosures mandated by the SEC for mutual funds.

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Definitions:

Focused On Others

The act or practice of putting the needs, concerns, or interests of others before one's own.

Maintain Relationships

The efforts taken to keep personal or professional connections strong, healthy, and mutually beneficial.

Apply Rules

The process or practice of putting established guidelines or regulations into action.

Fairly

In a manner that is just, equitable, and in accordance with the rules or standards.