Question
In: Finance
You are considering whether to invest in a mutual fund that holds a portfolio stocks versus...
You are considering whether to invest in a mutual fund that holds a portfolio stocks versus directly investing in stocks yourself. Compared to investing directly in stocks, what is the main advantages of investing in the mutual fund and the main disadvantage?
Solutions
Expert Solution
| The main advantage of a mutual fund over picking your own stocks: | |||||||||
| Mutual fund is a way of investing in equity markets without directly investing your money in stocks. | |||||||||
| In other words, when you select a mutual fund, you are basically selecting a | |||||||||
| professional portfolio manager to manage your money. | |||||||||
| The mutual fund is usually a wide variety of stocks and bonds that are | |||||||||
| selected by the portfolio manager of the mutual fund. The portfolio | |||||||||
| manager is a professional who has the necessary knowledge and skills | |||||||||
| required to select the stocks and bonds in the portfolio. | |||||||||
| In addition, the portfolio manager also has the tools and resources needed | |||||||||
| to select the stock and bond investments in the mutual fund. | |||||||||
| The main disadvantage of a mutual fund over picking your own stocks: | |||||||||
| Mutual funds are costly to an investor because they consist of | |||||||||
| advertising fees and sales charges. | |||||||||
jeff jeffy answered 2 months agoRelated Solutions
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0.56
Bond fund
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0.25
The correlation between fund returns is
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As a portfolio manager, you are considering three mutual funds: a stock fund, a bond fund,...
As a portfolio manager, you are considering three mutual funds:
a stock fund, a bond fund, and a money market bond that yields a
sure rate of
2.45 %.
Below is the information concerning the two risky funds: (Total 50
points)
Expected return
Standard deviation
Stock fund
0.22
0.56
Bond fund
0.06
0.25
The correlation between fund returns is
0.26 .
Find the weights of the minimum-variance
portfolio and calculate its expected return and its standard
deviation....
As a portfolio manager, you are considering three mutual funds: a stock fund, a bond fund,...
As a portfolio manager, you are considering three mutual funds:
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sure rate of
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concerning the two risky funds: (Total 50 points)
Expected return
Standard deviation
Stock fund
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Bond fund
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Derivatives contracts available include...
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