FIN 3005 FIN3005 Week 11 Individual Work (Everest University)
FIN3005 Week 11 Individual Work (Everest University)
QUESTION AND APPLICATIONS
1. Mutual Fund Services: Explain why mutual funds are attractive to small investors. How can mutual funds generate returns to their shareholders?
2. Open- versus Closed-End Funds: How do open-end mutual funds differ from closed-end funds?
3. Load versus No-Load Mutual Funds: Explain the difference between load and no-load mutual funds.
4. Use of Funds: Like mutual funds, commercial banks and stock-owned savings institutions sell shares, but the proceeds received by mutual funds are used in a different way. Explain.
5. Risk of Treasury Bond Funds: Support or refute the following statement: Investors can avoid all types of risk by purchasing a mutual fund that contains only Treasury bonds.
6. Fund Selection: Describe the ideal mutual fund for investors who wish to generate tax-free income and also maintain a low degree of interest rate risk.
7. Exposure to Exchange Rate Movements: Explain how changing foreign currency values can affect the performance of international mutual funds.
8. Reform of Hedge Funds: Explain how the Financial Reform Act of 2010 applies to hedge funds.
9. Tax Effects on Mutual Funds: Explain how the income generated by a mutual fund is taxed when the fund distributes at least 90 percent of its taxable income to shareholders.
10. Performance: According to research, have mutual funds outperformed the market? Explain. Would mutual funds be attractive to some investors even if they are not expected to outperform the market? Explain.
11. Money Market Funds: How do money market funds differ from other types of mutual funds in terms of how they use the money invested by shareholders? Which security do MMFs invest in most often? How can an MMF accommodate shareholders who wish to sell their shares when the amount of proceeds received from selling new shares is less than the amount needed?
12. Risk of Money Market Funds: Explain the relative risk of the various types of securities in which a money market fund may invest.
13. Interest Rate Risk of Funds: Is the value of a money market fund or a bond fund more susceptible to rising interest rates? Explain.
14. Diversification among Mutual Funds: Explain why diversification across different types of mutual funds is highly recommended.
15. Impact of Credit Crisis on Hedge Funds: Explain why some hedge funds failed as a result of the credit crisis.
16. REITs: Explain the difference between equity REITs and mortgage REITs. Which type would likely be a better hedge against high inflation? Why?