Open-End Mutual Fund Companies Sell Directly to Investors and Repurchase

question 82

True/False

Open-end mutual fund companies sell directly to investors and repurchase units whenever investors wish to sell them.

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Definitions:

Net Present Value

A financial metric that estimates the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows over a period of time.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest from previous periods.

Cash Payback Period

The time it takes for an investment to generate an amount of cash inflows equal to the initial cost of the investment.

Net Cash Flows

The difference between cash inflows and cash outflows within a specified period, reflecting the total amount of cash being transferred into and out of a business.