AFM121 Chapter Notes - Chapter 19: Money Market Fund, Interest Rate Risk, Market Liquidity

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM121
• Professor: John D' Amato

Document Summary

Interest distributions are fully taxable: fixed-income funds. Mortgage funds i. terms may be five years or longer, more interest rate risk ii. distributions are usually in forms of interest. primary investing objectives are income and safety i. subject to capital gains and losses due to inherent interest rate risk. invest primarily in income trusts: balanced funds. Must adhere to minimum and maximum percentages that can be invested in each asset class. Canadian balanced, canadian income balanced, global balanced and asset allocation, canadian tactical asset allocation. similar objectives to balanced funds i. not restricted to hold specified minimum percentages in any class of investment: equity or common stock funds. Most assets are in common shares, also maintain limited amounts of other assets for liquidity, income, and diversification purposes. Equity funds vary greatly in degree of risk and growth objectives. most popular and diverse type of fund i. distributions are in the form of capital gains and dividends.