Flashcards on Business Studies: Management, Finance, and Quality
Business Studies: Management, Finance, Quality Guide
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Investment Types & Features
63 cards
Card 1
Question: What is one advantage of unit trusts regarding management of investments?
Answer: They are managed by a fund manager who buys shares on the stock exchange (JSE).
Card 2
Question: How do unit trusts help small or new investors with contributions?
Answer: A small amount can be invested per month, making them accessible to many people.
Card 3
Question: Why are unit trusts considered relatively safe despite market fluctuations?
Answer: They are managed according to rules and regulations and diversification in the fund reduces severe fluctuations in returns.
Card 4
Question: What is a liquidity advantage of unit trusts?
Answer: They are easy to cash in when an investor needs money.
Card 5
Question: How do unit trusts perform relative to inflation over medium to long term?
Answer: They generally beat inflation over the medium/long term.
Card 6
Question: What range of investment options do unit trusts offer to investors?
Answer: Investors have a variety of funds to choose from, ranging from lower to higher degrees of risk.
Card 7
Question: How simple is it to start investing in unit trusts?
Answer: Easy — investors complete a few relevant forms or invest online.
Card 8
Question: What types of returns do unit trusts offer?
Answer: Competitive returns in the form of capital growth and dividend distribution.
Card 9
Question: What makes fund managers for unit trusts trustworthy?
Answer: Fund managers are knowledgeable and required to be accredited to sell unit trusts.
Card 10
Question: How do unit trusts lower potential risk for individual investors?
Answer: By pooling investors' money into a diverse fund, which spreads and lowers individual risk.