Why are stock mutual funds so popular? Briefly outline the highlights of each type of fund
What will be an ideal response?
Answer: There is a stock mutual fund for almost every need — about 6,000 in all. They serve many purposes as follows:
1. Aggressive growth funds try to maximize capital appreciation while ignoring income; they are risky with wide price swings.
2. Small-company growth funds are aggressive funds in undiscovered companies with potentially unlimited future growth.
3. Growth funds are similar to aggressive funds but pay more attention to strong firms that pay dividends.
4. Growth-and-income funds attempt to provide a steady stream of income and have some potential for increasing value.
5. Sector funds try to capture the advantage of a single industry; they are risky and lose the diversity advantage.
6. Index funds buy stocks that make up the S&P 500, which is good for those who want to mimic the market rather than beat it at low cost.
7. International funds seek to diversify and grow by focusing on general world regions or foreign companies with abnormal growth potential regardless of location.
You might also like to view...
How can a service retailer best cope with the problems associated with the inconsistency of service?
A. Use low prices during off-seasons to help match supply and demand. B. Increase staffing at peak demand times. C. Avoid simultaneity of production and consumption of service. D. Use mass production. E. Train and motivate service providers.
______ is feeling under-rewarded or over-rewarded in comparison with others.
A. Valence B. Feedback C. Perceived inequality D. Perceived inequity
The majority of community and cause-related efforts supported by firms are intended to help the public and to ________
A) support employee causes B) increase employee retention C) promote the firm D) raise firm standards E) meet the firm's mission
The BOT option for large projects is designed to:
A) Automate the payment process. B) Automate the closeout process. C) Keep the door open for new projects between the customer and project organization. D) Limit risk for the customer in the short run.