business
Open end funds
- Stands ready at all times to sell or buy back shares
- Will always trade at their NAV
- Over 8000 open end funds versus around 1000 closed end
- Certainty of pricing
- Low initial investment
Closed end funds
- Has a fixed number of shares. Purchasers and sellers must trade with each other
- Shares are bought fund at inception only
- Fund does not stand ready to buy the shares back from investors
- Closed end funds trade in securities markets at discount or premium
Advantages of money mrkt mutual funds
- Safety of principal
- Total and immediate liquidity
- Better yields than offered by banks
- Low minimum investments
- Professional management
- No purchase and redemption fees
- Free check writing privileges
Advantages of index funds
- Simplicity
- Broad Diversification
- Low cost
- Potentially lower taxes
- Regression to the mean
- Most funds lags
- ETF’s
I. Futures Contract.
A. Definition
II. Differences between Futures and Forwards.
1. Standard Contract
2. Exchange traded
3. Range of delivery dates
4. Settled daily
5. Contract usually closed prior to maturity
6. Regulated under CFTC
III. Characteristics.
1. Long: Commitment to purchase asset.
2. Short: Commitment to deliver asset.
3. Futures contract is a zero sum game.
IV. How to close a Futures Position
1. Physical Delivery
2. Offsetting trade.
3. Exchange for Physicals.
V. Types of Futures Contracts.
1. Agricultural and metallurgical.
2. Interest rates.
3. Currencies.
4. Indexes.
VI. Purpose of Futures Markets.
1. Price Discovery.
2. Hedging
3. Speculation.
VII. How Futures are traded.
1. Role of the Clearing House.
I. Futures Contract.
A. Definition
II. Differences between Futures and Forwards.
1. Standard Contract
2. Exchange traded
3. Range of delivery dates
4. Settled daily
5. Contract usually closed prior to maturity
6. Regulated under CFTC
III. Characteristics.
1. Long: Commitment to purchase asset.
2. Short: Commitment to deliver asset.
3. Futures contract is a zero sum game.
IV. How to [next page]