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CASE STUDIES: FUNDAMENTAL INVESTMENT Let's say you have just received the amount of money $50,000 for...

CASE STUDIES: FUNDAMENTAL INVESTMENT

Let's say you have just received the amount of money $50,000 for your inheritance.

Now, between three type of investments below

- Stock

- Bond

- Mutual Fund

Decide a category that you will going to put the money in and explain why do you choose it?

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Answer #1

The category chosen is 'Mutual Fund'.

The preference is due to the following advantages of Mutual Fund:

  • Can get the benefit of the expertise of the mutual fund mangers
  • Need not spend time consistently on watching the market trends
  • MFs have got many types of investment vehicles. There are equity funds, debt funds, hybrid funds, index funds etc from which to choose from
  • Mutual fund investments are liquid as they are either exchange traded or bought and sold by the fund itself
  • The transaction costs are mimimized
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