An investor who is not interested in regular income stream but wants an increase in capital amount should invest in:Question 10Select one:a.capital stable fundb.capital guaranteed fundc.balanced growth fundd.managed growth fund
Question
An investor who is not interested in regular income stream but wants an increase in capital amount should invest in:Question 10Select one:a.capital stable fundb.capital guaranteed fundc.balanced growth fundd.managed growth fund
Solution
The investor who is not interested in a regular income stream but wants an increase in capital amount should invest in a managed growth fund (option d).
Here's why:
a) Capital stable funds aim to provide a stable, low-risk investment with potential for some capital growth. They are not designed for high capital growth.
b) Capital guaranteed funds guarantee the initial investment amount (the capital) at the maturity of the fund. They are not designed for high capital growth.
c) Balanced growth funds are a mix of growth and income assets, aiming to provide a balance between capital growth and income. They may not provide the high capital growth the investor is looking for.
d) Managed growth funds are designed for long-term capital growth. They invest in assets with high growth potential, such as shares and property. This makes them suitable for an investor looking for capital growth rather than regular income.
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