ABA CTFA Practice Test - Questions Answers, Page 60
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I- A gold producers wants to hedge his losses attributable to a fall in the price of gold for his current gold inventory.
II- A cattle farmer wants to hedge his exposure to changes in the price of his livestock These are the examples of __________ who need to manage their exposure to fluctuations in the prices of their commodities.
End users need to hedge the prices at which they can purchase these commodities for instance:
Money market funds bond funds (also called ''fixed income'' funds) , and stock funds (also called equity funds) are the categories of:
___________ have relatively low risks, compared to other mutual funds.
Money market funds:
Some of the risks associated with bond funds are all of the following EXCEPT:
If interest rates fall, a bond issuer may decide to pay off (or ''retire'') its debt and issue new bonds that pay a lower rate. When this happens, the fund may not be able to reinvest the proceeds in an investment with a high return or yield. This is an example of:
Overall ''market risk'' poses the greatest potential danger for investors in ____________.
_____________ funds may specialize in a particular industry segment, such as technology or consumer products stocks.
There are different classes of mutual funds. Classes that typically do not have a front-end sales load. Instead they may impose a contingent deferred sales load and a 12b-1 fee (along with other annual expenses) is called:
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