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Essentials Of Investments
Found in: Page 105
Essentials Of Investments

Essentials Of Investments

Book edition 9th
Author(s) Zvi Bodie, Alex Kane, Alan Marcus, Alan J. Marcus
Pages 748 pages
ISBN 9780078034695

Short Answer

Would you expect a typical open-end fixed-income mutual fund to have higher or lower operating expenses than a fixed-income unit investment trust? Why?

Unit Investment Fund

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Step by Step Solution

Definition

Open-end fixed-income mutual fund and fixed-income unit investment trust are subsets of mutual fund categorized by investment policy.

Explanation of choice of fund type

An open-end fund will have higher fees since they are actively marketing and managing their investor base. On the other hand, a unit investment trust need not spend too much time on such matters since investors find each other.

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