Define the importance of mutual funds in the investment intermediaries.

Mutual funds:

Mutual funds pool resources by several companies and individuals and invest these resources within diversified portfolios of stocks, bonds and money market instruments. The major types of an open-ended mutual fund are continuously permits shareholders to sell (redeem) outstanding shares, and investors to buy recent shares at any time. The value of such shares is find out by the value of the mutual fund’s holding assets. Two major advantages characterise mutual funds. Primary, mutual funds give opportunities to small investors to invest into financial securities and diversify risk. Next, mutual funds take advantage of lower transaction costs while they buy larger blocks of financial securities.