Friday, May 2, 2014

investment companies outline

Mutual funds
  • open end funds
  • open-shares can be created or reedemed
  • open end investment companies
  • professional advisors are paid a management fee,%age of net asset value
  • net asset value, NAV, value of assets of investment company-cash+held securities (investments firm has made)-liabilities
  • calculate every day at close of New York Stock Exchange,NYSE
  • Public Offering Price, POP, price customers pay for shares=net asset value + sales charge
prospectus,
  • MUST come with new sale-when sales suggestion made or before transaction is complete
  • how shares can be bought or redeemed
12b charges and fees, asset based sales charges
  • pay for advertising, marketing, prospectus costs
  • a.k.a. asset based sales charges
  • used to pay broker/dealers for selling mutual funds
mutual fund advantages
  • diversification
  • liquidity
  • professional management

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