Question 1

Exchange traded funds (ETFs)invest __________. ​

Accepted Answer

ETFs often invest in narrow market segments to track specific indices or sectors, allowing investors to target particular areas of the market.

Question 2

Exchange traded funds are investment company shares that trade __________ on stock exchanges. ​

Accepted Answer

ETFs trade throughout the day on stock exchanges, allowing investors to buy and sell shares at market prices. This differs from mutual funds which are only priced and traded at the end of the day. Option A is incorrect because ETFs do not necessarily trade at the closing price, as their value fluctuates throughout the day. Option C is inaccurate because it is not necessarily true that ETFs trade more than actively managed mutual funds. Option D is also incorrect, as the volume of trading for ETFs can vary throughout the day.

Question 3

A(n)__________ real estate investment trust (REIT)would invest in income-producing properties and mortgage loans. ​

Accepted Answer

A hybrid REIT would invest in both income-producing properties and mortgage loans, making it the best choice for the given description. A mortgage REIT would only invest in mortgage loans, while an equity REIT would mainly invest in properties and may not prioritize mortgage loans. A spider is not a type of REIT.

Question 4

__________ gives the property owner an allowance for the decline in the physical condition of real estate over time. ​

Accepted Answer

Depreciation is the allowance given to property owners for the decrease in the value of their property over time due to wear and tear or obsolescence. It is a non-cash expense that is deducted from the property's income for taxation purposes.

Question 5

Mike has decided to purchase a real estate property that is expected to generate a net operating income (NOI)of $63,000 per year.With a 9 percent cap rate,the property would have an estimated value of _____.

Accepted Answer

The formula for estimating property value using the cap rate is Property value = NOI/cap rate. Plugging in the information given, we get Property value = $63,000/0.09 = $700,000. Therefore, the estimated value of the property is $700,000.

Question 6

RACE Mutual fund is a no-load fund that had a net asset value of $25.60 one year ago.Today,the net asset value (NAV)is $28.83.During the year,dividends of $0.72 were paid out and a capital gain distribution of $0.65 was made.Calculate the approximate yield for RACE.(Show all work.)

Accepted Answer

The answer of RACE Mutual fund is a no-load fund...

Question 7

The actual ownership of a mutual fund is in the hands of the __________. ​

Accepted Answer

The actual ownership of a mutual fund is with the shareholders, as they own a portion of the assets held by the fund. The management company manages the fund, custodians hold the fund's assets, and distributors sell the fund to investors.

Question 8

Tom takes a loan of $60,000 at 4 percent annual interest to purchase a property worth $100,000.He earns an annual income of $10,000 after expenses but before interest and income taxes are deducted.If the income tax rate is 30 percent,then the leveraged return on the real estate investment is _____.

Accepted Answer

The answer of Tom takes a loan of $60,000 at...

Quiz 13: Investing in Mutual Funds, ETFS and Real Estate

Exchange traded funds (ETFs) invest __________.

Exchange traded funds are investment company shares that trade __________ on stock exchanges.

A(n) __________ real estate investment trust (REIT) would invest in income-producing properties and mortgage loans.

__________ gives the property owner an allowance for the decline in the physical condition of real estate over time.

Mike has decided to purchase a real estate property that is expected to generate a net operating income (NOI) of $63,000 per year.With a 9 percent cap rate,the property would have an estimated value of _____.

RACE Mutual fund is a no-load fund that had a net asset value of $25.60 one year ago.Today,the net asset value (NAV)is $28.83.During the year,dividends of $0.72 were paid out and a capital gain distribution of $0.65 was made.Calculate the approximate yield for RACE.(Show all work.)

The actual ownership of a mutual fund is in the hands of the __________.

Tom takes a loan of $60,000 at 4 percent annual interest to purchase a property worth $100,000.He earns an annual income of $10,000 after expenses but before interest and income taxes are deducted.If the income tax rate is 30 percent,then the leveraged return on the real estate investment is _____.

Quiz 13: Investing in Mutual Funds, ETFS and Real Estate

Exchange traded funds (ETFs) invest __________. ​

Exchange traded funds are investment company shares that trade __________ on stock exchanges. ​

A(n) __________ real estate investment trust (REIT) would invest in income-producing properties and mortgage loans. ​

__________ gives the property owner an allowance for the decline in the physical condition of real estate over time. ​

Mike has decided to purchase a real estate property that is expected to generate a net operating income (NOI) of $63,000 per year.With a 9 percent cap rate,the property would have an estimated value of _____.

RACE Mutual fund is a no-load fund that had a net asset value of $25.60 one year ago.Today,the net asset value (NAV)is $28.83.During the year,dividends of $0.72 were paid out and a capital gain distribution of $0.65 was made.Calculate the approximate yield for RACE.(Show all work.)

The actual ownership of a mutual fund is in the hands of the __________. ​

Tom takes a loan of $60,000 at 4 percent annual interest to purchase a property worth $100,000.He earns an annual income of $10,000 after expenses but before interest and income taxes are deducted.If the income tax rate is 30 percent,then the leveraged return on the real estate investment is _____.

Exchange traded funds (ETFs) invest __________.

Exchange traded funds are investment company shares that trade __________ on stock exchanges.

A(n) __________ real estate investment trust (REIT) would invest in income-producing properties and mortgage loans.

__________ gives the property owner an allowance for the decline in the physical condition of real estate over time.

The actual ownership of a mutual fund is in the hands of the __________.