Question 1
Nearly all mutual funds operate as regulated investment companies. This means that
◦ they are no-load funds.
◦ portfolio decisions are mandated by government authorities.
◦ they do not pay taxes on their income.
◦ their investments are guaranteed by the FDIC.
Question 2
One drawback of investing in mutual funds is the
◦ annual management fee.
◦ lack of liquidity of fund shares.
◦ amount required for the initial investment.
◦ lack of information on the performance of the fund.