Mutual Funds

• Open-end fund - An investment company that stands ready to buy and sell shares at any time
• Closed-end fund - An investment company with a fixed number of shares that are bought and sold only in the open stock market
• Net Asset Value (NAV) - The value of assets less liabilities held by a mutual fund, divided by the number of shares outstanding

To quantify as a regulated investment company, the fund must follow three basic rules:

1. It must in fact be an investment company holding almost all of its assets as investments in stocks, bonds, and other securities
2. Limits the funds to using no more than 5% of its assets when acquiring a particular security
3. The fund must pass through all realized investment income to fund shareholders

Types of Expenses and Fees

• Frond end load - A sales charge levied on purchases of shares in some mutual funds
• No-Load funds
• Offering Price = NAV + load
• Back-end load - Charges levied on redemptions

Money Market Mutual Fund - A mutual fund specialized in money market instruments. Their NAVs are always $1 per share. A money market fund simply sets the number of shares equal to the fund's assets. As the fund earns interest on its investments, the fund owners are simply given more shares.

Money Market Deposit Account - Banks offering MMMF and FDIC protection