What are Mutual Funds?
Answers were Sorted based on User's Feedback
Answer / chandrasekhar hota
Mutual Funds are nothing but financial institutions which
pool money from investors to invest in securities and
generate returns from them and finally pass back the
returns to the respective investors after keeping their
expenses.
| Is This Answer Correct ? | 94 Yes | 6 No |
Answer / nimesh
in short, mutual fund means investing in security market
with minimum risk.
those persons who dont know about security market and want
to invest their money in security market can invest through
mutual fund.
mutual fund means diversify the risk by investing money in
different sector or different market and give maximum
reaturns to the investors.
| Is This Answer Correct ? | 54 Yes | 4 No |
Answer / srinu
mutual funds,It is a financial innovation provided to the
way of collecting savings from small investers
Equity,Security of indastrial organasation with less risk.
As for SEBI,mutual funds means A fund established in the
form of a trust to rise the sale of units to the
public or a section of public under one or more skills.
| Is This Answer Correct ? | 20 Yes | 3 No |
Answer / rajesh
Mutual funds means pooling of investments from small
investors and investing in the stock exchange is called
mutual funds
| Is This Answer Correct ? | 19 Yes | 5 No |
Answer / vijay chandhar
mutual fund is an investing company that pools money from
small investors and allows them to buy and sell shares in
continuous basis and use the capital to raise by investing
in securities of different companies
| Is This Answer Correct ? | 18 Yes | 5 No |
Answer / pramod
mutual fund is institution that have a pool of money which
they invest in stock market like equity ,debt and other
financial instrument and make profit.
in other word today there are a lot of invester who wants
to invest their money in stock but they don't have
sufficient knowledge about stocks due to this they want
invest their money in mutul fund company who will genrate
income from stock market.mutul fund company is profetional
to do these activity.they have a lot of staff who analyse
and sale, purchase and doing work to related to stock market
| Is This Answer Correct ? | 13 Yes | 0 No |
Answer / srinivas.v
A pool of money invested according to stated investment
objectives
| Is This Answer Correct ? | 16 Yes | 8 No |
Answer / raju
MUTUAL FUND MEANS POOL OF MONEY IS COLLECTED FROM INVESTERS
IN INVESTING IN NEW OBJECTIVES.
| Is This Answer Correct ? | 13 Yes | 5 No |
mutual fund is a vehical collecting money from public in
order to invest in markets and securities with an bjective
or scheme of fund agreed betwen the invetor and AMC of fund.
example for markets :- NYSE BSE AND CAC#
example for securities :- MID CAP, SMAILL CAP AND BLUE CHIP
| Is This Answer Correct ? | 6 Yes | 1 No |
Answer / natheeshram.t
A mutual fund is made up of money that is pooled together
by a large number of investors who give their money to a
fund manager to invest in a large portfolio of stocks and /
or bonds.
When a lot of shares are available on stock exchanges, you
and me don't know which companies to invest in. But let us
say a guy named xxxxx knows, and keeps track of the market
daily. So we give him our money and he buys and sells
stocks for us.
| Is This Answer Correct ? | 5 Yes | 1 No |
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Read the case given below and answer the questions given at the end. Krutika Designers Ltd is an Indian company engaged in designing shirts for an international shirt manufacturer. Its operations are currently restricted to designing shirts for the Indian market. The firm is interested in extending its operations to the European markets, but is restricted by its lack of knowledge about the latest fashions and trends prevailing there. Hence, the firm has decided to open an office in Finland for establishing a network in Europe that will give the firm access to the needed information. The firm feels that its does not have the capability of sustaining itself in the foreign markets in the long-term, and will be able to generate additional revenue from these activities only for the next 5 years. After that, the Finnish office will have to be closed down. The firm anticipates an initial investment of Rs.14 million. The project is expected to generate the following cash flows over the 5 years period. Year Cash flow (Finnish Marks) 1 2 3 4 5 10,00,000 20,00,000 50,00,000 50,00,000 30,00,000 These cash flows are expressed in terms of today’s money. The firm can claim depreciation in India according to the Straight Line Method. The salvage value from the project is expected to be nil. The Finnish Government does not provide any incentives for foreign investments. However, currently it is making an attempt to have better economic ties with India. Hence, it has decided to extend a loan of 50,000 marks to Krutika Designers. The loan will be at a concessional interest rate of 7%. The loan is to be repaid in 5 equal annual installments which will include the interest payments. The project will generate additional borrowing capacity of Rs.5 million for the firm. However, as the firm does not have any firm contract with the international shirt manufacturer, its domestic revenues are expected to be very volatile. Therefore, there is no surely that the firm will be able to absorb the tax benefits arising out of depreciation and additional borrowing capacity. The firm does not intend to indulge in any illegal money transfers. The current spot rate for the Finnish Mark is Rs.7.25/FM. The inflation rates in India and Finland for the next 5 years are expected to be 8% and 3% respectively. The exchange rate is expected to move in tandem with the inflation rates. Indian tax rate is 35% while Finnish tax rate is 40%. India and Finland have entered into a tax treaty whereby the earnings of the residents of one country are taxable in that country only. In India, the nominal risk-free interest rate is 11%. The same is 6% in Finland. The Indian nominal interest rate (including risk-premium) is 15%, while that in Finland is 9%. The nominal all-equity rate in India is 18%. 1. Comment on the financial viability of the project. 2. What are the different circumstances in which nominal all-equity discount rate and real all equity discount rate should be used for discounting the cash flows? Explain the rationale behind it. 3. Comment on the financial viability of the project if the firm is sure about being able to absorb the tax benefits arising out of depreciation and increased borrowing capacity. 4. Explain the concept of exchange risk and how it affects an international project. 5. How can the financial structure of a project be used to overcome repatriation restrictions? What are the additional benefits of such maneuvers?
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