FINS2643 Lecture Notes - Lecture 4: Capital Asset Pricing Model, Warren Buffett, P200
16 Oct 2018
School
Department
Course
Professor
Document Summary
> money from large number of smaller investors pooled together. > the more capital used to invest = increasing chance of profiting. = as funds increase, the diseconomies of scale increase as well because funds might become too big to manage. > increasing problem since it is harder and harder to find it profitable. This scheme is where we as investors buy a unit (part of another fund) and when the fund does well, profit obtained. Four main participants: unit holders, investment company, trustee, investment manager. Unit holders = beneficiaries the ppl who will get the profits: income, capital gains, owners of the trust. Trustee = safeguard the assets of the trust (look after them) they do get paid for their services. Investment manager = make investment decisions on behalf of clients. They want to outperform relative to the market return. They don"t want to or need to beat achieve abnormal returns. it.
