Unit Test Paper solution Std 3 Aaspas Date 1-2-2020
What are mutual funds?Mutual fund is a financial instrument which pools the money of different people and invests them in stocks, bonds etc.
Each investor in a mutual fund scheme owns units of the fund, which represents a portion of the holdings of the scheme.
The securities are selected keeping in mind the investment objective of the scheme. Mutual funds are managed by asset management companies (AMCs).
Risk diversification
The biggest advantage of investing in mutual funds versus stocks is risk diversification.
Every stock is subject to three types of risk: company risk, sector risk and market risk.
Company risk and sector risk are unsystematic risks, while market risk is known as systematic risk.
What is the essential difference between unsystematic and systematic risk?
The stock price of a company may fall if the company's financial performance is poor, even if the market rises.
On the other hand, even if the company performs well, the stock price may still fall, if the market falls.
Mutual funds help investors diversify unsystematic risks by investing in a diversified portfolio of stocks across different sectors.
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Brief Detail of Primary school Unit Test paper Solution ::::
Exam body ::: Sarv shixa abhiyan
Exam date :::: 1-2-2020
Standard ::: 3
Subject ::: Aaspas
category ::: paper solution
Paper solution by :::
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