Mutual funds pool resources from multiple investors for investment purposes from "summary" of Financial Markets and Institutions, Global Edition by Frederic S. Mishkin,Stanley G. Eakins
Mutual funds are financial intermediaries that pool resources from multiple investors for investment purposes. These funds offer individuals the opportunity to invest in a diversified portfolio of financial assets, such as stocks, bonds, and other securities. By pooling resources, mutual funds are able to achieve economies of scale, which can lead to lower transaction costs and greater diversification for investors. Investors in mutual funds purchase shares in the fund, which represent their ownership of a portion of the fund's portfolio. The value of these shares fluctuates based on the performance of the underlying assets in the fund. Mutual funds are managed by professional investment managers who make decisions about which assets...
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