Understanding Mutual Funds
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Questions and Answers

What is a mutual fund?

  • A government-issued investment bond
  • An insurance product for retirement savings
  • A vehicle that pools contributions from investors and invests in various securities (correct)
  • A type of bank account for individual investors

    • How do individuals who contribute to a mutual fund benefit?

  • They receive fixed interest payments regardless of the fund's performance
  • They have no direct benefits from contributing to the fund
  • They share in the income, gains, losses, and expenses of the fund based on the number of units or shares they own (correct)
  • They receive tax deductions for their contributions

    • How are mutual funds managed?

  • By volunteer investors
  • By individual contributors to the fund
  • By professional money managers according to the fund's policies and objectives (correct)
  • By government officials

    • What has been the trend in the Canadian mutual fund industry?

    <p>Tremendous growth in both product choices and assets under management</p> Signup and view all the answers

    Are mutual funds suitable for all investors?

    <p>No, there is no one perfect investment that suits all investors; however, mutual funds have become important investment products for many investors</p> Signup and view all the answers

    What types of securities can a mutual fund invest in?

    <p>Stocks, bonds, and money market instruments</p> Signup and view all the answers

    How do individuals who contribute to a mutual fund benefit?

    <p>They share in the income, gains, losses, and expenses of the fund based on the number of units or shares they own</p> Signup and view all the answers

    Who manages the assets of a mutual fund?

    <p>Professional money managers</p> Signup and view all the answers

    What has been the trend in the Canadian mutual fund industry?

    <p>Tremendous growth in choice of products available to investors and in the dollar value of assets under management</p> Signup and view all the answers

    Are mutual funds a simple investment vehicle?

    <p>No, they are complex investment vehicles available in a variety of different forms and through different distribution channels</p> Signup and view all the answers

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