Mutual Funds

question 50

Multiple Choice

Mutual funds

• A)take in deposits from savers and make loans to borrowers.
• B)sell shares to savers and purchase assets with the funds.
• C)take in deposits from savers and purchase assets with the funds.
• D)bring together small savers and small borrowers.

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Definitions:

Monthly Rate

The interest or return generated by an investment or loan over a one-month period, often annualized for comparison purposes.

Loan Payment Schedule

A detailed plan showing the amount and timing of payments required to repay a loan, including both principal and interest components.

Amortized Loan

A loan with scheduled periodic payments that consist of both principal and interest, designed to pay off the debt over a set period.

Effective Rate

The actual interest rate an investor receives or pays on a financial product, factoring in the effects of compounding.