Question 1

Match the following pieces of legislation with the function achieved by each regulation as stated in question
-Requires mutual funds to develop mechanisms and procedures to avoid insider trading abuses.

Accepted Answer

The Insider Trading and Securities Fraud Enforcement Act of 1988 requires mutual funds to develop mechanisms and procedures to avoid insider trading abuses.

Question 2

Match the following pieces of legislation with the function achieved by each regulation as stated in question
-Exempts mutual fund sellers from oversight by state securities regulators.

Accepted Answer

The National Securities Markets Improvement Act of 1996 exempted mutual fund sellers from oversight by state securities regulators, which is the function achieved by this regulation.

Question 3

Match the following pieces of legislation with the function achieved by each regulation as stated in question
-Allows the SEC to introduce circuit breakers to halt trading on exchanges.

Accepted Answer

The answer of Match the following pieces of legislation with...

Question 4

Match the following pieces of legislation with the function achieved by each regulation as stated in question
-Requires a mutual fund to file a registration statement with the SEC.

Accepted Answer

The answer of Match the following pieces of legislation with...

Question 5

Match the following pieces of legislation with the function achieved by each regulation as stated in question
-Requires a mutual fund to set rules and procedures regarding the fund's prospectus sent to investors.

Accepted Answer

The answer of Match the following pieces of legislation with...

Question 6

Match the following pieces of legislation with the function achieved by each regulation as stated in question
-Sets rules to prevent conflicts of interest, fraud, and excessive fees or charges for fund shares.

Accepted Answer

The Investment Company Act of 1940 regulates investment companies (mutual funds, exchange-traded funds, closed-end funds) to protect investors and prevent conflicts of interest, fraud, and excessive fees.

Question 7

Match the following pieces of legislation with the function achieved by each regulation as stated in question
-Makes the purchase and sale of mutual fund shares subject to various antifraud provisions.

Accepted Answer

The answer of Match the following pieces of legislation with...

Question 8

Match the following pieces of legislation with the function achieved by each regulation as stated in question
-Regulates the activities of mutual fund advisors.

Accepted Answer

The Investment Advisers Act regulates the activities of investment advisers, including mutual fund advisors.

Question 9

Match the following pieces of legislation with the function achieved by each regulation as stated in question
-Provides for the supervision of mutual fund share distributions.

Accepted Answer

The answer of Match the following pieces of legislation with...

Question 10

To what level should the price of Microsoft shares decline in order for the NAV of Morningstar fund to remain constant if the price of P&G rises to $40?

Accepted Answer

The answer of To what level should the price of...

Question 11

Match the following pieces of legislation with the function achieved by each regulation as stated in question
-Requires a mutual fund to furnish full and accurate information on all financial and corporate matters to prospective fund purchasers.

Accepted Answer

The answer of Match the following pieces of legislation with...

Question 12

If the price of P&G shares rises to $35 and the price of Microsoft falls to $40.00, what is the new NAV of both funds?

Accepted Answer

The new NAV of the P&G fund is $26.50 and the new NAV of the Microsoft fund is $22.50.

Quiz 5: Financial Services: Mutual Funds and Hedge Funds

Match the following pieces of legislation with the function achieved by each regulation as stated in question -Requires mutual funds to develop mechanisms and procedures to avoid insider trading abuses.

Match the following pieces of legislation with the function achieved by each regulation as stated in question -Exempts mutual fund sellers from oversight by state securities regulators.

Match the following pieces of legislation with the function achieved by each regulation as stated in question -Allows the SEC to introduce circuit breakers to halt trading on exchanges.

Match the following pieces of legislation with the function achieved by each regulation as stated in question -Requires a mutual fund to file a registration statement with the SEC.

Match the following pieces of legislation with the function achieved by each regulation as stated in question -Requires a mutual fund to set rules and procedures regarding the fund's prospectus sent to investors.

Match the following pieces of legislation with the function achieved by each regulation as stated in question -Sets rules to prevent conflicts of interest, fraud, and excessive fees or charges for fund shares.

Match the following pieces of legislation with the function achieved by each regulation as stated in question -Makes the purchase and sale of mutual fund shares subject to various antifraud provisions.

Match the following pieces of legislation with the function achieved by each regulation as stated in question -Regulates the activities of mutual fund advisors.

Match the following pieces of legislation with the function achieved by each regulation as stated in question -Provides for the supervision of mutual fund share distributions.

To what level should the price of Microsoft shares decline in order for the NAV of Morningstar fund to remain constant if the price of P&G rises to $40?

Match the following pieces of legislation with the function achieved by each regulation as stated in question -Requires a mutual fund to furnish full and accurate information on all financial and corporate matters to prospective fund purchasers.

If the price of P&G shares rises to $35 and the price of Microsoft falls to $40.00, what is the new NAV of both funds?