Obtain a prospectus and an annual report for a major mutual fund that includes some international securities.
Question:
Obtain a prospectus and an annual report for a major mutual fund that includes some international securities. Carefully read the prospectus and annual report and study the portfolio’s composition in light of the fund’s stated objectives.
a. Evaluate the amount of diversification and the types of industries and companies held. Is the portfolio well diversified?
b. Discuss the additional risks faced by an investor in this fund compared with an investor in a domestic stock portfolio such as the S&P 500.
Step by Step Answer:
Answer and thorough explanation The portfolio is diversified across a number ...View the full answer
Fundamentals Of Investing
ISBN: 9780135175217
14th Edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
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Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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