On the other hand, an entity whose income is less than its expenditure can raise capital by borrowing or selling equity claims, decreasing its expenses, or increasing its income. The lender can find a borrower, a financial intermediary, such as a bank or buy notes or bonds in the bond market. The lender receives interest, the borrower pays a higher interest than the lender receives, and the financial intermediary pockets the difference. A bank aggregates the activities of many borrowers and lenders. A bank accepts deposits from lenders, on which it pays the interest.
The bank then lends these deposits to borrowers. Banks allow borrowers and lenders, of different sizes, to coordinate their activity. Banks are thus compensators of money flows in space. Finance is used by individuals (personal finance), by governments (public finance), by businesses (corporate finance), etc. , as well as by a wide variety of organizations including schools and non-profit organizations. In general, the goals of each of the above activities are achieved through the use of appropriate financial instruments, with consideration to their institutional setting.
Finance is one of the most important aspects of business management. Without proper financial planning a new enterprise is unlikely to be successful. Managing money (a liquid asset) is essential to ensure a secure future, both for the individual and an organization. 1. 2 Concept A mutual fund is a form of collective investments that pools money from many investors and invests their money in stocks, bonds, short-term money market instruments, and/or other securities. Mutual fund is a generic term for various types of collective investment vehicle.
Assignment # 41) One of the most important ways a bank can make sure its loans meet regulatory standards and are profitable is by establishing a written loan policy. A loan policy gives loan officers and the bank's management specific guidelines in making some loan decisions and in shaping the over all portfolios of the bank. The following are the most important elements of a Written Loan Policy; ...
In the United Kingdom and Western Europe (including offshore jurisdictions), other forms of collective investment vehicle are prevalent, including unit trusts, open-ended investment companies (OEICs), SICAVs and unitized insurance funds. In Australia the term “mutual fund” is generally not used; the name “managed fund” is used instead. However, “managed fund” is somewhat generic as the definition of a managed fund in Australia is any vehicle in which investors’ money is managed by a third party (NB: usually an investment professional or organization).
Most managed funds are open-ended (i. e. there is no established maximum number of shares that can be issued); however, this need not be the case. Additionally the Australian government introduced a compulsory superannuation/pension scheme which, although strictly speaking a managed fund, is rarely identified by this term and is instead called a “superannuation fund” because of its special tax concessions and restrictions on when money invested in it can be accessed. According to Association of Mutual Funds in India a mutual fund is defined as “A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal.
The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. ” 1. 3 Mutual Fund Operation Flow Chart In a mutual fund, the fund manager, who is also known as the portfolio manager, trades the fund’s underlying securities, realizing capital gains or losses, and collects the dividend or interest income. The investment proceeds are then passed along to the individual investors. The value of a share of the mutual fund, known as the net asset value per share (NAV), is calculated daily based on the total value of the fund divided by the number of shares currently issued and outstanding.
... recommended for investors to choose the right fund manager to manage their investments. From the in-depth analysis on alternative investments, we realized ... indirectly and they are imposed by mutual funds which are the underlying investment options in the variable annuity. Fees ... times of the year when an investor is allowed to redeem shares. Hedge funds typically have quarterly liquidity dates. ...