The Ultimate Alternative Energy Mutual Funds Quiz

By: Staff

4 Min Quiz

Image: refer to hsw

About This Quiz

Investing in an alternative energy mutual fund is a relatively risk-free way to enhance your financial portfolio. With a little research and a lot of good options, you can invest wisely and effectively. Take this quiz and find out how and why you might want to invest in an alternative energy mutual fund.

Which one of the following is not an example of alternative energy?

Coal, gasoline and natural gas are existing sources of fuel, while wind power, solar power and bio-fuels are examples of alternative energy.

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What does an alternative energy mutual fund do?

An alternative energy mutual fund is a company that puts its investors’ money into a group of companies involved in the development of alternative energy resources, such as wind, geothermal or solar energy. The major funds also invest in companies that promote a clean environment.

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What is the New Alternatives Fund’s claim to fame?

Established in 1982, the New Alternatives Fund’s was the first mutual fund to concentrate on alternative energy. Its objective is to provide long-term growth of capital through environmental investment.

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What is the criterion for the Guinness Atkinson Alternative Energy Fund to invest in a company?

Established in 2006, the Guinness Atkinson Alternative Energy Fund invests in global companies that obtain more than half of their income from alternative energy or alternative energy technology.

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When you invest in a mutual fund, what privileges do you acquire?

For your investment in a mutual fund, you become a shareholder in the fund. In that position, you can buy more shares of stock at any time or sell your stock at any point.

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Who manages an alternative energy mutual fund?

A professional investment manager manages alternative energy mutual funds. The investment manager decides which companies to buy and sell, with the aim of increasing the fund as effectively as possible.

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Where is the largest solar plant in Europe located?

The largest European solar plant, which is in Spain, can produce 11 megawatts of electricity.

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What is a stock index?

A stock index measures the value of a given group of stocks. It reports the value as an average that fluctuates as the market moves.

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Which alternative energy index is run by Dow Jones?

Run by Dow Jones, the World Alternative Energy Index tracks the 20 largest global stocks in renewable energy, energy efficiency and distributed energy.

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In the context of this article, what does pure play refer to?

Companies referred to as pure play are those that are engaged mainly in the field of alternative energy. The Ardour Global Alternative Energy Index, for example, tracks such companies.

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In the name S&P Global Alternative Energy Index, what does S&P stand for?

The S&P stands for Standard and Poor. The S&P Global Alternative Energy Index tracks the performance of publicly traded alternative energy companies, as well as companies devoted to clean energy and nuclear energy.

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What is Morningstar?

Morningstar is a reliable resource on the Internet where you can find out information about individual mutual fund companies.

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How reliable is the information on an individual mutual fund Web site?

While you should compare the information you gather from authoritative resources with information from the Web sites of the mutual funds you're interested in, bear in mind that some of the info on the latter sites may be skewed in favor of the fund and its potential performance.

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What is a prospectus?

A prospectus provides detailed information about a mutual fund, including all the fees that you will have to pay. To be forewarned and forearmed, you should order a prospectus from each mutual fund you're interested in.

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How do you go about purchasing shares in a mutual fund?

You can buy shares in the fund directly from the fund company or from an online broker such as Etrade, Ameritrade or Charles Schwab.

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What does the Burbo Bank Wind Farm do?

Located in England, the 25-turbine Burbo Bank Wind Farm can produce more than 90 megawatts of energy from wind power.

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Why is it preferable to own stock in a group of companies than in one individual firm?

Owning shares in a group of companies as opposed to owning stock in an individual company tends to lower your risks.

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According to the article, what risk could be involved in investing in alternative energy mutual funds?

Any investment bears a certain amount of risk. The market could suddenly shift. If, for example, the price of oil dropped considerably, alternative energy companies might then be less attractive to investors.

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How can you keep tabs on how your stocks are doing?

Even though a professional is managing the stocks in your mutual fund, be proactive by frequently checking the status of your fund on an online brokerage site. Also, study the quarterly statements the fund company sends you.

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Before you invest in a mutual fund, what should you find out about it?

Before investing in a mutual fund, research such information as the fund’s past performance, what companies are in the portfolio and whether the fund manager actively manages the fund.

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