QUESTION 9 ( 6 MARKS ) Identify two comparative advantages in investing in each of the following; a

Two competitive advantage of investment into-

1. INVESTMENT TRUSTS-

A.Investment trust are generally cost-effective and investment into the investment trust will mean that there would be low cost involved they will be offering a wide range of investment into securities.

B. Investment trust are generally having a closed ended type of structure because these portfolio managers will be having only liabilities of managing lower portfolio value and they can focus better.

2. INVESTMENT INTO OPEN ENDED INVESTMENT FUNDS-

A. Open ended investment funds will be offering a great amount of liquidity and realisation of the investment value in quicktime.

B. These are having a high level of professional management and they are offering systematic investments also.

3. INVESTMENT INTO INDIVIDUAL STOCKS AND BONDS-

A. Individual stocks are generally very high returning securities and they are having a high risk associated with them and they are also having a high risk reward ratio.

B. Investment into bonds are also beneficial as they are offering with uniform rate of return and higher level of security than equity.