Discuss the various types of risk to which mutual fund shareholders are exposed. What is the major risk exposure of mutual funds? Are all funds subject to the same level of risk? Explain.
Answer to relevant QuestionsWhat are the advantages and disadvantages of mutual fund ownership? Briefly describe each of the following types of mutual funds: a. Aggressive-growth funds b. Equity-income funds c. Growth-and-income funds d. Bond funds e. Sector funds f. Socially responsible funds Refer to Problem 12.9 above. If there were a 3% load on this fund, assuming you pur chased the same number of shares, what would your rate of return be? Briefly discuss holding period return (HPR) and yield as measures of investment return. Are they equivalent? Explain. Explain the role of portfolio revision in the process of managing a portfolio.
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