10 Questions
What is one of the factors influencing the investment strategy of insurance companies?
Timing and amount of future claims
Which type of funds are usually initiated by a non-refundable capital contribution and managed by trustees for specific purposes?
Endowment funds
What is the main source of income for banks?
Interest rate spreads
What distinguishes assurance or endowment policies from term insurance policies?
Higher premiums
In the context of large organizations, which investor group typically forms a substantial portion of various financial instrument investors?
Pension funds
Why do individuals often prefer mutual funds over managing investments themselves?
Individuals have limited knowledge of investment outlook and struggle to keep up with changes in the economic environment.
How are professionals managing mutual funds compensated?
By receiving remuneration linked to the performance of the funds.
What is a key characteristic of mutual funds that distinguishes them from individual investment strategies?
They pool investors' money and invest according to pre-specified parameters.
Why are pension funds created by employers or employee unions?
To manage the retirement funds of employees.
In what way do mutual funds benefit individual investors in terms of profit distribution?
Profits are distributed among individual investors according to their holdings in the fund.
Explore how mutual funds can help individuals overcome constraints in resources and knowledge when making investment decisions. Learn about the benefits of delegating investment management to professionals in rapidly changing economic environments.
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