Key Concepts
1. Describe the various types of mutual funds, and elaborate where necessary.
2. Describe the various types of money market funds, and elaborate where necessary.
3. Discuss the participation of mutual funds in financial markets.
POINT/COUNTER-POINT:
Should Mutual Funds be Subject to More Regulation?
POINT: No. Mutual funds can be monitored by their shareholders (just like many firms), and the
shareholders can enforce governance.
COUNTER-POINT: Yes. Mutual funds need to be governed by regulators, because they are accountable
for such a large amount of money. Without regulation, there could be massive withdrawals from mutual
funds when unethical behavior by managers of mutual funds is publicized.
WHO IS CORRECT? Use InfoTrac or some other source search engine to learn more about this issue and
then formulate your own opinion.
ANSWER: Recent scandals have found that some mutual funds were allowing their shares to be traded
after the market closed but at the price that existed at the market close. More regulation can prevent future
scandals. However, there is a fine line between enough regulation to prevent such abuses and too much
regulation.