ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A mutual fund is a pool of money managed by a professional Fund Manager. It is a trust that collects money from a number of investors who share a common investment objective and invests the same in equities, bonds, money market instruments and/or other securities.

Detailed explanation-2: -A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds.

Detailed explanation-3: -Like stocks, mutual funds are considered equity securities because investors purchase shares that correlate to an ownership stake in the fund as a whole.

Detailed explanation-4: -An Asset Management Company (AMC) is a firm that invests the funds pooled from individual investors in securities with the objective of optimal return for investors in exchange for a fee.

Detailed explanation-5: -Some mutual funds offer investors different types of shares, known as “classes.” Each class invests in the same portfolio of securities and has the same investment objectives and policies.