Every Mutual Fund Has a Stated Investment Objective

question 101

Essay

Every mutual fund has a stated investment objective. Disclosure of the investment objective is required by the SEC, and is used to classify a mutual fund into one of several categories. Briefly explain the investment objective of each of the following categories.
(a) growth funds
(b) aggressive growth funds
(c) equity-income funds
(d) balanced funds

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Definitions:

Hierarchy Of Needs

A theory in psychology proposed by Abraham Maslow suggesting that people are motivated by five basic categories of needs: physiological, safety, love, esteem, and self-actualization, in ascending order of importance.

Appetite Hormones

Biochemical substances produced in the body that regulate hunger, satiety, and food intake.

Hypothalamic Activity

Functions and regulatory processes carried out by the hypothalamus, a region of the brain controlling body temperature, hunger, and thirst.

James-Lange Theory

The theory that our experience of emotion is our awareness of our physiological responses to an emotion-arousing stimulus.