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4 years ago

Why do some people consider mutual funds a more convenient investment than stocks or bonds?

Business

2 answers:

stich3 [128]4 years ago

7 0

Answer:

People consider mutual funds a more convenient investment than stocks or bonds because of the following:

1. Mutual fund is less risky compared to stocks or bonds

2. There is comparatively higher returns compared to stocks or bonds

3. Mutual funds are managed by experts compared to stocks or bonds

4. Liquidity

5. Mutual funds are convenient compared to stocks or bonds

Explanation:

Mutual fund is an investment whereby funds are mobilized from different investors to buy shares, stocks, bonds of different entities operating in different industries.

The total investment is known as a portfolio. Such investment is managed by experts known as portfolio managers.

1. Mutual Fund is Less Risky Compared to Stocks or Bonds

Unlike stocks or bonds, mutual funds invest in securities of varying risks thereby diversifying the entire portfolio.

2. There is Comparatively Higher Returns compared to Stocks or Bonds

Unlike stocks or bonds, mutual funds invest in different industries and sectors thereby ensuring some stability and high returns

3. Mutual Funds are Managed by Experts Compared to Stocks or Bonds

Mutual funds are managed by skilled individual who are highly knowledgeable about the market, but such skill may be lacking for individual investors who wants to invest in stocks or bonds.

4. Liquidity - Mutual funds enjoy some degree of liquidity as they are allowed to buy or sell their share of the fund once a day at the close of the market at the fund’s net asset value

5. Mutual Funds are Convenient Compared to Stocks or Bonds

Unlike stock and bonds you do not need to do personal research before investment with mutual fund. stock monitoring is done by the fund manager.

MAXImum [283]4 years ago

4 0

I think because in a mutual they both gain and invest but on their own its too much

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Lucci Inc. is a retailing firm specializing in high-end merchandise. Each of Lucci's stores uses the retail inventory method by

ludmilkaskok [199]

Answer:

1 Line item description Cost Retail

2 Beginning inventory 40000 360000

3 Purchases 1000000 10000000

4 Transportation in 50000

5 Purchase returns -20000 -196000

6 Net purchases(3+4+5) 1030000 9804000

7 Net additional markups 800000

8 Cost to retail ratio 1070000 10964000

component(2+6+7)

9 Net markdowns -500000

10 Sales -9800000

11 Ending inventory,retail(8+9+10) 664000

Setup calculation:

Cost to retail ratio = Cost to retail ratio component at cost/Cost to retail ratio component at retail

= 1070000/10964000

= 0.097592

= 9.76%

Ending inventory,cost = Ending inventory,retail*Cost to retail ratio

= 664000*9.76%

= $64806

Cost of goods sold = Sales*Cost to retail ratio

= 9800000*9.76%

= $956480

7 0

2 years ago

An oil and gas producing company owns 42,000 acres of land in a southeastern state. It operates 630 wells which produce 18,000 b

valkas [14]

Answer:

The bid amount should be $13,200,264.

Explanation:

An oil and gas producing company owns 42,000 acres of land in a southeastern state.

It operates 630 wells which produce 18,000 barrels of oil per year and 1.7 million cubic feet of natural gas per year.

The revenue from the oil is $1,800,000 per year and for natural gas the annual revenue is $581,000 per year.

Total Annual Revenue

= Revenue from oil + Revenue from gas

= $1,800,000 + $581,000

= $2,381,000

The bid amount should be the present worth of total annual revenue.

Present Worth of total annual revenue

= $Revenue \times\ \frac{( 1 + i )^{n} -1 }{i (1 + i)^{n} }$

= $$2,381,000\ \times\ \frac{( 1 + 0.11 )^{9} -1 }{0.11 × (1 + 0.11)^{9} }$

= $$2,381,000\ \times\ \frac{( 1.11 )^{9} -1 }{0.11 × (1.11)^{9} }$

= $$2,381,000\ \times\ \frac{2.5580 - 1 }{0.11 × 2.5580 }$

= $$2,381,000\ \times\ \frac{1.5580 }{0.281}$

= $$2,381,000\ \times\ 5.544$

= $13,200,264

7 0

3 years ago

At the beginning of the period, a company reports a balance in office supplies of $450. During the period, the company purchases

Hoochie [10]

Answer:

Explanation:

Before passing the journal entry, first, we have to compute the total supplies consumed. The formula to compute the total supplies consumed is shown below:

= Beginning balance of supplies + Purchase of supplies - ending balance if supplies

= $450+ $3,400 - $900

= $2,950

Now the journal entry would be

Supplies expense A/c Dr $2,950

To Supplies A/c $2,950

(Being supplies consumed recorded)

4 0

3 years ago

"Which type of report would help the company study available options and how should it be organized?"

oksian1 [2.3K]

a yardstick report would be used. it would be organized indirectly, describing the problem, explaining alternatives, establishing criteria for comparison, evaluating each alternative in terms of the criteria, and making recommendations.

6 0

3 years ago

A 16-year, $1,000 par value zero-coupon rate bond is to be issued to yield 6 percent.

Solnce55 [7]

Answer:

a) $393.65

b) $458.11

c) $217.63

Explanation:

Given data:

16-year ( n )

$1000 par value ( FV )

6% ( R )

A) determine the initial price of the bond

= FV / ( 1 + R ) ^ n

= 1000 / ( 1.06 ) ^ 16

= 1000 / 2.5403 = $393.65

B ) when interest rate drops to 5% determine the value of the zero-coupon rate of bond

= FV / ( 1 + R ) ^n

= 1000 / ( 1.05 ) ^ 16

= 1000 / 2.1829 = $458.11

C ) when interest rate increases to 10% determine the value of the zero-coupon rate of bond

= Fv / ( 1 + R ) ^ n

= 1000 / ( 1.1 ) ^ 16

= 1000 / 4.5950 = $217.63

7 0

2 years ago