Management and Organizational Studies 2277A/B Lecture Notes - Lecture 13: Interest Rate Risk, Canadian Imperial Bank Of Commerce, Canadian Dollar
Document Summary
Pooled investment fund: pools together money from many investors and invests that mony in a variety of stocks, bonds, or indexes of stocks and/or bonds. Pool money with other investors in order to purchase many types of stocks and bond investments. Pooled investments that you are most likely to come across invlude mutual funds, exchange traded funds, and segregated funds. Pooled investments provide diversification, economies of scale, and marketability. Marketability: refers to the ease with which an investor can convert an investment into cash. Economies of scale: since accumulating a lot of money, the individual securities that are purchased within the fund can be purchased at lower fees. Equity mutual funds: sell units, or shares, to individuals and use this money to invest in stocks. Bond mutual funds: sell units, or shares to individuals use this to invest in bonds. Balanced mutual funds: sell units, or shares and use it to invest in combination of bonds and stocks.