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Open-Ended Mutual Funds: CNBC Explains

Mutual funds make up a large portion of America’s retirement funds and investments. Understanding how these funds operate should be a big part of anyone’s financial knowledge. Salman Khan of the Khan Academy outlines a hypothetical example of how an open-ended mutual fund works with its investors.

From this first video, you’ll understand:

  • The nature of an open-ended mutual fund
  • How investors take shares in a mutual fund

From this second video, you’ll understand:

  • What Net Asset Value (NAV) means in the context of a mutual fund
  • How redemptions force managers to keep some assets in cash

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