BU111 Final: Alternate Types of Investment - Mutual Funds all the notes pertaining to Mutual Funds. includes sample calculations, diagrams, and examples
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BU111 Full Course Notes
Verified Note
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Document Summary
An investment vehicle that pools money from many different investors and reinvests the money in a portfolio of securities (for example: bonds, stocks, real estate, mortgages etc) One of the most popular forms of investment amongst small investors. Mutual funds are said to be open ended investments because they continuously sell new shares in the fund (called units) to the investigating public. The current market value of one share in a mutual fund is determined by the following formula: Share value = cmv of all assets held by fund liabilities. The value of a fund"s share price does not depend on supply and demand. Can easily find fund which suits to your investment style. Usually highest in the first year and declines subsequently. Annual management fees (management expense ratio or mer) Based on annually on the value of the funds assets. Usually in the range of 2-3% per year.
