financial management - Running head FINANCIAL MANAGEMENT...

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Running head: FINANCIAL MANAGEMENT 1 Financial Management Name Professor Institution Date
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FINANCIAL MANAGEMENT 2 Question 1 The major differences between mutual funds and hedge funds are: Mutual funds are corporations that take money from savers, use it to buy financial instruments while hedge funds accept money from investors, and use the funds in various investment activities (Brigham &Ehrhardt, 2013). The second difference is that mutual funds can have thousands of investors while hedge funds are limited to institutional investors, which are a relatively small group of wealthy individuals. Another major difference is that hedge funds are less regulated than mutual funds. Lastly, mutual funds are required by law to value their portfolios and price their securities on a daily basis based on market quotations of the day while in hedge funds, there are no rules governing how they price their funds and in most cases, investors are unable to quote the value of their investment.
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