What should investors consider when deciding whether to purchase shares of a mutual fund? What characteristics of a mutual fund should be considered? Briefly discuss each characteristic.
Answer to relevant QuestionsWhat is a prospectus? How does an investor obtain one? What information does a prospectus provide? What is a mutual fund’s net asset value (NAV)? How is the NAV calculated and reported? If Hope (from problem 1) had invested the same amount of money in a no load fund with the same price per share, how many shares could she have purchased? Should the Sampsons invest their savings in mutual funds? Why or why not? What is a portfolio? How does a diverse portfolio help reduce risk?
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