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108. '' A Mutual Fund thereby helps the common man to realize their investment needs by offering an opportunity to invest in a diversified , professionally managed basket of securities at a realtively lower risk.'' Explain
Mutual Fund can be described , basically , as a collective investment vehicle , where customers pool in their monetary resources towards a common financial objectives . The money thus collected , is them invested by the Fund Managers in different types of securities depending upon the objective of the scheme . These could spread among various capital market instruments like equities , dervivaties and other government securities . The income secured in the course of these investmets and the capital appreciation realized (after deduction of expenses and fee charges of Fund Managers) is shared among the unit holders in proportion to the number of units held by them. A Mutual Fund thereby helps the common man to realize their investment needs by offering an opportunity to invest in a diversified , professionally managed basket of securities at a relatively lower risk. There are varied Mutual Funds classified by their invesment objectives risk profile and structure.
Ans: Mutual Fund is a collective investment vehicle wherein customers pools in their monetary resources towards a common financial objective . The money thus collected , is then invested by the Fund manager in different types of securities depending upon the objective of the scheme. These could spread among various capital market instruments and the income secured in the course of these investments and the capital appreciation realized are shared among the unit holders in proportion to the number of units held by them . Thus , a Mutual Fund helps the common man to realize their investment needs by offering an opportunity to invest in a diversified , professionally managed basket of securities at a relatively lower risk.