CHAPTER 17 Notes.docx - CHAPTER 17 – MUTUAL FUNDS CHAPTER...

CHAPTER 17 – MUTUAL FUNDS
CHAPTER OBJECTIVES:
17.1 Provide a background on mutual funds
17.2 Identify types of stock and bond mutual funds
17.3 Explain the return-risk trade-off among mutual funds
17.4 Discuss how to choose among mutual funds
17.5 Describe quotations of mutual funds
17.6 Explain how to diversify among mutual funds
17.7 Explain how investing in mutual funds fits within your financial plan
Chapter 17 – Use the PowerPoint and text to complete the outline notes: Please follow
all directions and upload completed notes to DropBox to receive credit for attending
class. Notes are due by 11:59 PM on the due date. DO NOT ALTER FORMAT – JUST
FILL IN AND/OR ANSWER.
There is a video detailing your Mutual Fund assignment, just like the Stock video last
week. The video can be found in the media tab – entitled Mutual Fund Assignment. I will
also go over a couple of points from the notes in detail.
I. Background on Mutual Funds: Mutual funds are managed by professional
portfolio managers who make the decisions regarding what
securities to purchase. There are two main kinds:
a. Stock Mutual Funds: These funds sell shares to individuals and
then proceed to use stocks for investments.
b. Bond Mutual Funds: These funds also sell shares to individuals but
proceed to use bonds for investments .
II. What are the benefits of investing in mutual funds?
a. Immediate diversification with little initial investment .
b. Portfolio manager expertise
c. Meet specific investment goals

III. Net Asset Value (NAV) is … the market value of the securities that a mutual
fund has purchased minus any liabilities owed
a. How is it reported? Per share basis