Mutual Funds

Question 1

Steps of setting up a mutual fund ? (4)

Answer 1

1. Fund manager takes th savings
2. Combine savings with teh money from many other investors
3. Invest teh money is stocks, bonds and securities
4. Returns to be divided among the investors ( in proportion of their money invested )

Question 2

Wha are the main advantages of mutual funds ? 4

Answer 2

1. (Affordable portfolio diversification)Diversification (helps reduce teh overall risk of an investers portfolio)
2. Liquidity (money can be recovered at basically anytime because mutual funds are easy to buy and sell )
3. Affordability
4. Certain schemes may have Tex deferrals