CFS Module 1

  1. What are the 4 classes of REITs?
    • office buildings
    • residential apartments
    • regional malls
    • shopping centers
  2. What are the returns for the FHFA real estate market vs. REITs?
    3.3% vs 14.2% annualized since 1991.
  3. Over the past 33 years, what has housing prices done vs. inflation?
    5.2% vs. 4%, yielding a net return of only 1.2%
  4. What is the "back end sales charge" for home ownership?
    Roughly 3% when counting property taxes, homeowner's insurance, an maintainance costs.

    Higher if you include homeowners association dues, mortgage interest, improvements and maintainance, and buying and selling costs, you end up with a net NEGATIVE of 1.7% per year.
  5. Looking at all 5-year rolling periods over the past 31 years, what percentage of the time did medium-term goverment bonds post positive returns?
    100% of the time.
  6. The EAFE consists of how many countries outside North America?
  7. A company may not have earnings, but all companies have what?
    book value
  8. Historically, a stock with a P/B of less than ____ is said to be cheap?
  9. Historically a stock with a P/B of more than ___ is thought to be expensive.
  10. What is the average for company's P/B value?
  11. What is the name of the first U.S. mutual fund and when did it begin?
    MIT- 1924
  12. Of all the households that use mutual funds for their IRAs, what is the most popular broad category?
  13. A mutual fund's Financial Highlights Table includes data for how many years? By reviewing this table, one can see that mutual funds make how many kinds of periodic payments to investors?
  14. What third party maintains information about shareholder accounts as well as the calculation and distribution of dividends?
    the transfer agent
  15. How often must mutual funds file an SEC report showing all holdings?
  16. Can a no-load fund charge a redemption fee?
  17. What percentage of collected 12b-1 fees is used for advertising and promotion? Which was why the fee was originally justified.
    Only 2%
  18. For all practical purposes, what is the maximum 12b-1 fee a fund can charge under FINRA regulation?
  19. At the request of the U.S. Congress, the General Accounting Office studied the issue of mutual fund fees and expenses. What was the conclusion of this study?
    No conclusion was reached.
  20. There has been quite a bit of publicity about the level of mutual fund expenses. Of the 20 largest fund companies, how many are charging less on an asset-weighted basis than they were 15 years ago?
  21. What is the average total compensation paid to an equity fund portfolio manager annually?
  22. HOw is a fund's turnover rate calculated?
    The lesser of purchases or sales, dividing that number by average net assets.
  23. Fund shareholders (25%) now redeem shares at what annual rate?
  24. What costs are not reflected in the prospectus?
    brokerage charges.
  25. Which share class offers break points?
    A shares
  26. Regulatory bodies are very concerned about mutal fund B shares. Based on performance figure comparisons, are their fears warranted?
    Probably not.
  27. Factoring in client impatience and possible frustration, what class of shares probably makes the most sense?
    C Shares
  28. Do long-term changes in a mutual fund's NAV have the same significance as multiple-year variations in a stock's price?
  29. In order to be categorized as "diversified" a mutual fund cannot have more than what percentage of its assets in any single stock?
  30. What is the maximum percentage a diversified mutual fund can have when it comes to the voting stock of any company it owns shares of?
  31. In order to be diversified, a mutual fund must follow certain guide-line and/or requirements for at least what percentage of its portfolio?
Card Set
CFS Module 1
A test for the Certified Funds Specialist Module 1