Dfgde Etrert

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VSRD-IJBMR, Vol. 2 (4), 2012, 167-178


A Study of Opportunities and Challenges for Mutual Fund in India : Vision 2020


In this paper, I have undertaken a study on mutual funds. The mutual fund sectors are one of the fastest growing sectors in Indian Economy and have awesome potential for sustained future growth. Mutual funds make saving and investing simple, accessible, and affordable. The advantages of mutual funds include professional management, diversification, variety, liquidity, affordability, convenience, and ease of recordkeeping—as well as strict government regulation and full disclosure. The Mutual Funds
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Investor plans for long horizon after considering the fundamental factors and assumes moderate risk. The main objectives of rational investors are maximizing returns and minimizing risk, safety of the principal, tradability and liquidity are his subsidiary objectives. Financial instruments can be categorized by form depending on whether they are cash instruments or derivative

instruments: Cash instruments are financial instruments whose value is determined directly by markets. They can be divided into securities, which are readily transferable, and other cash instruments such as loans and deposits, where both borrower and lender have to agree on a transfer. Derivative instruments are financial instruments which derive their value from the value and characteristics of one or more underlying entities such as an asset, index, or interest rate. They can be divided into exchangetraded derivatives and over-the-counter (OTC) derivatives. Alternatively, financial instruments can be categorized by "asset class" depending on whether they are equity based (reflecting ownership of the issuing entity) or debt based (reflecting a loan the investor has made to the issuing entity). If it is debt, it can be further categorized into short term (less than one year) or long term. Foreign Exchange instruments and transactions are neither debt nor equity based and belong in their own category. A legal document such as a

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