Comparative advantages of investing

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1) Would you expect a typical open-end fixed-income mutual fund to have higher or lower operating expenses than a fixed-income unit investment trust? Why?

2) What are some comparative advantages of investing in the following? 

  • Unit investment trusts. 
  • Open-end mutual funds. 
  • Individual stocks and bonds that you choose for yourself.

3) Open-end equity mutual funds find it necessary to keep a small fraction of total investments, in very liquid money market assets. Closed-end funds do not have to maintain such a position in "cash-equivalent" securities. What difference between open-end and closed-end funds might account for their differing policies?

4) Balanced funds, life-cycle funds, and asset allocation funds all invest in both the stock and bond markets. What are the differences among these types of funds?

5) Why can closed-end funds sell at prices that differ from net asset value while open-end funds do not?

6) What are the advantages and disadvantages of exchange-traded funds versus mutual funds?

Reference no: EM133119696

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