Which of the following best describes a managed fund?Question 10Select one:A financial institution whose function is to provide cash income for employees of corporations or governments after they retireA financial institution that aims to achieve high investment returns on its invested funds by using exotic financial productsA financial institution that sells unsecured notes and uses the funds to make loans to household borrowers and companiesA financial institution that pools funds for individuals and then invests them in both the money and capital marketsA mutual fund managed by a financial intermediary that specialises in investing in short-term debt instruments
Question
Which of the following best describes a managed fund?Question 10Select one:A financial institution whose function is to provide cash income for employees of corporations or governments after they retireA financial institution that aims to achieve high investment returns on its invested funds by using exotic financial productsA financial institution that sells unsecured notes and uses the funds to make loans to household borrowers and companiesA financial institution that pools funds for individuals and then invests them in both the money and capital marketsA mutual fund managed by a financial intermediary that specialises in investing in short-term debt instruments
Solution
The best description for a managed fund from the options provided is: "A financial institution that pools funds for individuals and then invests them in both the money and capital markets".
Here's why: A managed fund is a type of investment where your money along with other investors' money is pooled together and invested by a professional fund manager. The fund manager uses the pooled money to buy assets, like shares, bonds, and other securities, on behalf of the fund's investors. This allows individual investors to have a diversified portfolio and access to a wider range of investments than they might be able to afford on their own. The fund manager makes all the decisions about which assets to buy, hold and sell, aiming to grow the fund's value and income over time.
Similar Questions
Which of the following best describes a finance company?Question 7Select one:A mutual fund managed by a financial intermediary that specialises in investing in short-term debt instrumentsA financial institution that sells unsecured notes and uses the funds to make loans to household borrowers and companiesA financial institution whose function is to provide cash income for employees of corporations or governments after they retireA financial institution that pools funds for individuals and then invests them in both the money and capital marketsA financial institution that aims to achieve high investment returns on its invested funds by using exotic financial products
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