History
In what decade did the first mutual fund start?
The first mutual fund started in the 1770's
The SEC is a government agency that is primarily responsible for oversight, what does SEC stand for?
Securities and Exchange Commissions
a prospectus is like a/an "____" for investors
what is an owners manual?
What type of trading can outperform the market?
Active Trading/Management
why is NAV calculated at the end of the day?
so investors get more accurate readings of the value of their stocks, bonds, cash, etc when it stops shifting because the market closes
Where did the first mutual fund start?
It started in Dutch
When was the Investment Act of 1940 introduced(what event preceded it)?
After the Stock Market Crash(1929)
what is a prospectus?
What is a packet of information all companies must make publicly available + file with the SEC when offering securities as investment opportunities to the public?
Name 1 (one) passively managed fund.
S&P500, Blackrock, NASDAQ, QQQ, Vanguard 500, etc.
what is NAV formula?
total assets - total liabilities / total shares outstanding
What country created the first MODERN mutual fund and why?
The U.S created the first modern mutual fund in order to pool more money
What does the Investment Act of 1940 regulate?
The formation and activities of investment companies to protect investors.
list three pieces of information in a prospectus.
what is company background, summary of financial situation, fees + expenses, overall purpose?
How do fees & risk differ between active and passive funds? Explain why.
Active > Higher Fees & Risks due to more trades
Passive > Lower fees & Risk due to less trades
if the assets of a fund grow but the number of shares is the same, does the NAV go up or go down?
NAV goes up
What event happened on 2007 that had a significant impact on the market?
The Great Recession
What is the 75-5-10 rule?
75% of assets in cash/securities, with no more than 5% per issuer, and max 10% ownership in a companies voting stock.
what is the easiest type of prospectus to understand?
What is a summary prospectus?
Why might an investor choose passive management over active management? List 3 reasons.
Prevents chasing the market, higher consistency, lower risk, simpler, aligns with long term goals.
if at the close of trading, a fund has $8,000,000 worth of assets, $500,000 worth of liabilities, with 2000 shares outstanding, what is NAV?
NAV is $3750
What is the name of the first mutual fund and what is it's direct translation in to English?
The name is Eendragt Maakt Magt and it translates in to "unity makes strength"
Mutual funds price their shares at NAV to ensure investors receive _____.
A fair and consistent price
what are 2 types of investments that would require a prospectus?
what is stocks, bonds, etfs, mutual funds?
Name 3 active management methods.
Sector Rotation, Day Trading, Hedging, Swing Trading, Market Timing, Shorting, Under and Overvalue Trading
a fund has $90,000 worthh of assets and $30,000 worth of liabilities with 30 shares outstanding. how much is the NAV?
NAV is $2000