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Eslam Essam

on 16 April 2015

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Transcript of RISK

Types Of Mutual Fund
1. Open-End Mutual Fund.
Advantages of Mutual Funds
Professional Management
Economies of Scale
Mutual Fund
An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.
The Potential that a chosen action or activity will lead to an undesirable outcome
Individual Risk
Financial Decision of the Household:
1- Consumption and Saving Decisions.
2- Investments Decisions.
3- Financing Decisions.
4- Risk Management Decisions.

These Decisions depends on :
a) Risk Aversion (The ability of an individual to bear risk)

b) Their Life Cycle

The End
Mutual Fund & Risk
2. Closed-End Mutual Fund.
In Finance:
It is the potential that an investor’s actual return will be different (Higher/Lower) than expected
Market Risk
Types of Market Risk:
a) Systematic Risk (Non Diversifiable Risk):
It is caused by Macroeconomic variable.
The whole Market (companies and sectors) are affected, due to Inflation, Interest Rates….etc.
b) Unsystematic Risk (Diversifiable Risk):
it is caused by a specific sector or firm due to some business conditions.

WHY is it Unsystematic and Diversifiable???
Unsystematic: because it differs from one sector to another.
Diversifiable:because we can decrease the risk by putting securities in the portfolio from different sectors

Main Players
1. Investor :
The person who is going to buy & sell securities
He must have a code which is unified in the stock market and not changed (ex. ID) and another one which is related to the brokerage firm that he deals with
2.Brokerage Firm
It is the intermediary between those who want to buy securities and those who want to sell securities in the stock market .
3. Bookkeeper
The place where the records about how much the person owns in terms of money and securities are kept
4.MCDR " Misr for Central Clearing, Depository & Registry" :
It handles the Buying Vs. Selling System (Delivery Vs. Payment System).
5. EFSA “ Egyptian Financial Supervisory Authority” :
It is responsible for the provision and supervision of the non-financial markets
It is responsible of issuing securities but not responsible of setting the prices
The only entity that has the right to cancel an order(selling/buying) in the stock market if anything gone wrong
Full transcript