I come across practice questions that use the phrase “bond fund”. Should I always assume it is a mutual fund?
Second, if a bond fund is an ETF, is the interest reported on INT-Div as it is with a bond fund that is a mutual fund?
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In most questions, I think it’s okay to assume a ‘bond fund’ is a mutual fund. It could also be a bond ETF, but questions that test the differences between mutual funds and ETFs must provide enough information to determine which one they’re focusing on.
You might have a typo in your second sentence, but I assume you’re asking if income from a bond ETF is reported on the 1099-DIV like it would from a bond mutual fund? If so, then yes! ETFs generally report taxation, including income (which originates as interest from the underlying securities but is paid as a dividend to ETF/mutual fund shareholders), the same way as mutual funds do.
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Thank you Brandon. Ugh. Yes! A typo. I am sleepy today and it is showing up in some of my practice quiz answers and obviously elsewhere. Good I wasn’t scheduled to take the exam today!
Generally, I am doing well (still want to do better) on practice questions, scoring 88% to 100% depending on the topic. Though I am not keeping stats on the following, I suspect that at least a third or more of my errors are due to missing a word in a question/answer and/or misreading a question. This must be a common problem. I find that if I read nearly out loud - sort of a whisper to myself, the problem is solved. Obviously, one cannot do that during the actual exam. Slowing down and reading silently helps, but less so. Any suggestions?
I digressed and changed the topic - I will try to edit the subject.
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This is a common issue many people struggle with. The good news is you’ve identified a big challenge (misreading questions). Now, just continue to practice with your challenge in mind. While you can’t talk aloud in the test center, you can “silently” talk out the question to yourself. As long as you’re not bothering anyone, you should be okay.
With that being said, treat every practice quiz or test like the actual exam. Pretend you’re unable to talk aloud, but see if you can really focus on each word you read. The more practice you accomplish, the better you’ll be prepared.
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