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3 years ago

What are mutual funds? Explain the associated risks.

Business

1 answer:

ipn [44]3 years ago

5 0

Answer:

A mutual fund is an investment program funded by shareholders that trades in diversified holdings and is professionally managed.

Risks:

The level of risk in a mutual fund depends on what it invests in. Stocks are generally riskier than bonds, so an equity fund tends to be riskier than a fixed income fund. Plus some specialty mutual funds focus on certain kinds of investments, such as emerging markets, to try to earn a higher return. These kinds of funds also tend to have a greater risk of a larger drop in value—yet the greater the risk, the greater the reward (or potential for higher returns).

Risks of Investing in Equity Mutual Funds The below are a few key risks involved with investing in equity funds: Volatility Risk: An equity fund invests primarily in the shares of companies listed on stock exchanges. Thus, the value of an equity fund is directly related to the performance of companies, in stocks of which it has invested.

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An engineering firm wrote a new policies and procedures manual that helped everyone know exactly what to do and how to do it. Wh

defon

Answer:

The correct answer is: the cost of it.

Explanation:

To begin with, knowing that planning, organizating, controling and directing are the basis of an structured company in order to achieve efficiently those there is a cost that has to be done, therefore that the major drawback of becoming more structured in the company is the cost of doing it, due to the fact that creating documents and teaching every one how to use it and more, the costs of the company will increase as well as the company will become more structured.

3 0

4 years ago

Read 2 more answers

The following refers to units processed by a breakfast cereal maker in August. Compute the total equivalent units of production

madam [21]

Answer:

Equivalent units of production= 746,000 units

Explanation:

Giving the following information:

Units completed 620,000 100%

Ending Work in Process 180,000 70%

<u>The weighted average method blends the costs and units of the previous period with the costs and units of the current period.</u>

<u></u>

Units completed in the period + Equivalent units in ending inventory WIP (units*%completion) = Equivalent units of production

Equivalent units of production= 620,000 + (180,000*0.7)

Equivalent units of production= 746,000 units

7 0

3 years ago

Which of the following is generally true about 401(k) and 403(b) retirement plans?

Evgen [1.6K]

A 401k is a retirement savings plan that is hosted/sponsored by the employer.

The 403b plan is also known as a TSA (tax-sheltered annuity) which is a retirement plan for **specific employees** that are from public schools, certain ministers, or they're employees of certain tax-except (excused) organizations.

6 0

3 years ago

Consider the following price indexes: 95 in 2011, 100 in 2012, 129 in 2913, 131 in 2014, and 160 in 2015. If the cost of the mar

Furkat [3]

If the cost of a market basket of goods and services is $3,500 in 2012, the cost of the same market basket in 2015 is $5,600.

<h3>What is the market basket?</h3>

According to common definitions, a market basket is a selected mix of goods and services.

The market basket is commonly used to track the price performance of a specific market or segment, especially with regard to inflation.

An example of a market basket is the Consumer Price Index (CPI). The CPI is an estimate of the average change of price paid for a specific basket of goods and services over time.

<h3>Data and Calculations:</h3>

Date Price Index

2011 95

2012 100

2013 129

2014 131

2015 160

Cost of market basket in 2012 = $3,500

Cost of market basket of goods and services in 2015 = $5,600 ($3,500/100 x 160)

Thus, if the cost of a market basket of goods and services is $3,500 in 2012, the cost of the same market basket in 2015 is $5,600.

Learn more about the consumer price index at brainly.com/question/1889164

7 0

2 years ago

Dr. Faulk's Outdoor Market wants to raise $2 million by selling 20-year coupon bonds at par. Comparable bonds in the market have

Greeley [361]

Answer:

The coupon rate should be: 6.62%.

Explanation:

* Yield to maturity calculation:

With the comparable bond in the market, we have:

+ Semiannual coupon payment = 2 million x 6.3% / 2 = $63,000

+ Price of the bond = 2,000,000 x 96.5% = $1,930,000

=> 1,930,000 = [ (63,000/YTM) x ( 1 - (1+ YTM)^(-40) ] + [2,000,000/(1+YTM)^40] <=> YTM = 3.31%.

* Coupon rate calculation:

To raise $2 million with the duration for 20-year, the present value of the coupon streams from the Bond the company offers plus the present value of the face value repayment in 20 years time; discounting at YTM, should equal to $2 million:

we have:

2,000,000 = [ (Coupon payment/3.31%) x ( 1 - 1.0331^(-40) ] + [2,000,000/1.0331^40] <=> Coupon payment = $66,200.

=> Coupon rate = Semiannual coupon payment / Face value x 2 = 66,200/2,000,000 x 2 = 6.62%

8 0

3 years ago