A:

A) Income and safety-oriented investors need look no further than the Muscat GNMA fund. Since the only investments held by the fund are GNMA certificates and short-term T-Bills, the fund is government-guaranteed for safety.

B) If an investor made a one-time deposit of $10,000 in the LIB Aggressive growth fund 5 years ago, and reinvested all dividends and gains, the total value today would be $26,230.75.

C)
The Fantastic Growth Fund has been paying regular dividends and capital gains for the past 6 years. Those who invest now may look forward to continued distributions from the fund in the future.

D) The XY Fund has been producing an average of a 15% total return for the past five years. If a person invested $10,000 today, in five years the total value of the investment would be approximately $21,000.


The correct answer is B.

A mutual fund may only use past performance in illustrations or presentations. Representations regarding future performance based on the fund's past performance are prohibited.

RELATED FAQS
  1. Which option is better on a mutual fund: a growth option or a dividend reinvestment ...

    When selecting a mutual fund, an investor has to make an almost endless number of choices. Among the more confusing decisions ... Read Answer >>
Related Articles
  1. Investing

    FGMNX,FAGIX,FMHTX,FCBFX: 4 Fidelity Funds for Income Seekers

    Discover the four best fixed-income mutual funds administered and managed by Fidelity Investments suitable for income-seeking investors.
  2. Financial Advisor

    3 Fidelity Funds Rated 5 Stars by Morningstar

    Discover three Fidelity mutual funds that have received five-star overall ratings from Morningstar.
  3. Financial Advisor

    Advising FAs: Explaining Mutual Funds to a Client

    More than 80 million people, or half of the households in America, invest in mutual funds. No matter what type of investor you are, there is bound to be a mutual fund that fits your style.
  4. Financial Advisor

    Top 5 American Funds for Retirement Diversification in 2016

    Discover five mutual funds from industry leader American Funds with high yields that are perfect for retirement savings diversification.
  5. Financial Advisor

    Understanding How Mutual Funds Pay Dividends

    The process by which mutual fund dividends are calculated, distributed and reported is fairly straightforward in most cases. Here's a look.
  6. Investing

    The Best 8 Funds For Regular Dividend Income

    Here's a list of the top mutual funds which pay regular dividends, for frequent income.
  7. Financial Advisor

    5 Characteristics of Strong Mutual Fund Shares

    Discover some of the basic characteristics shared by good mutual funds that investors can use to help them in selecting funds.
  8. Investing

    Reinvesting Your Mutual Fund Dividends

    Learn the benefits of reinvesting your mutual fund dividends, their impact over time, and when it is better to take the dividend payments as cash.
RELATED TERMS
  1. Mutual Fund Yield

    Dividend payments divided by the value of a mutual fund’s shares. ...
  2. Capital Appreciation Fund

    A mutual fund that attempts to increase asset value primarily ...
  3. Total Annual Fund Operating Expenses

    For a mutual fund or other type of fund management structure, ...
  4. Capital Gains Distribution

    The payment of proceeds prompted by a fund manager's liquidation ...
  5. Value Fund

    A stock mutual fund that primarily holds stocks that are deemed ...
  6. Growth Fund

    A diversified portfolio of stocks that has capital appreciation ...
Hot Definitions
  1. Money Market

    A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. ...
  2. Block (Bitcoin Block)

    Blocks are files where data pertaining to the Bitcoin network is permanently recorded.
  3. Fintech

    Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century.
  4. Ex-Dividend

    A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be ...
  5. Debt Security

    Any debt instrument that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount ...
  6. Taxable Income

    Taxable income is described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments ...
Trading Center