5 Questions
Explain the primary structures of mutual funds mentioned in the text.
The primary structures of mutual funds are open-end funds, closed-end funds, and unit investment trusts.
What are the advantages of investing in mutual funds compared to direct investing in individual securities?
The advantages of mutual funds include economies of scale, diversification, liquidity, and professional management.
List some countries where the term 'mutual fund' is commonly used and name a similar structure in Europe and the UK.
The term 'mutual fund' is commonly used in the United States, Canada, and India. A similar structure in Europe is the SICAV (investment company with variable capital), and in the UK, it is the open-ended investment company (OEIC).
What are index funds and actively managed funds in the context of mutual funds?
Index funds are passively managed funds that track the performance of an index, while actively managed funds seek to outperform stock market indices but generally charge higher fees.
What are the principal categories of investments for mutual funds mentioned in the text?
The principal categories of investments for mutual funds include money market funds, bond or fixed income funds, stock or equity funds, and hybrid funds.
Test your knowledge of mutual funds in this quiz! Learn about the different types of mutual funds, such as SICAV in Europe and OEIC in the UK, and their principal investment classifications.
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