Shares represents the portion of authorized stock. It can be in fractions or in whole numbers. There are three different types of shares.
1) Authorized shares. These means that the charter or the state has given permission to the corporation to issue certain amount of shares, whether its a 1000, 10000, or a million.
2) Issued shares. These are the shares that has been actually sold to the investors.
3) Unissued shares. These are the shares that has not been sold yet.
3 Different classes of shares in reference to mutual fund
1) Class A shares. Always has a load on purchase, meaning there is a sales charge. There is no redemption fee. Has the lowest operating cost in the long run.
2) Class B shares. Never has a load on purchase, but has a Conditional Deferred Sales Load or Charge (CDSL or CDSC). This means, you are charged a redemption fee that decreases during 6 to 8 year period. Class B shares will be converted to Class A shares when CDSL becomes 0%. Class B shares always has higher fees in the mutual fund than Class A shares.
3) Class C shares. Similar to Class B shares, except that it never becomes Class A shares. It has highest operation cost of all 3 classes. Redemption fee only lasts for 1 year.
What is a loaded mutual fund? It means shares are bought at the Public Offering Price (which includes the sales charge). So what is a "No-load fund"? This means shares are bought at the Net Asset Value, which doesn't include sales charge. There are no sales force or sales representatives, so no sales charge. How does the no-load fund pay for the cost of distribution, marketing, advertising, and other operational expenses? Well, they charge those expenses againsts its gross investment income. Redemption fees applies to no-load fund, where as load funds rarely has it.
Remember, higher fees associated with any mutual fund means it will give you lower rate of return on the long run.
Anyway, this a brief glimpse of what investments and shares are all about. If you wish to get all details how they work and how they are regulated, buy a Series 6 book.
2006-07-14 20:29:56
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answer #1
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answered by Anonymous
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These are major topics and complex in nature. Why not go to reputable websites and learn about shares and investments?
Try google and type in something like "beginner's guide to investment in _______________ " (the blank can be shares, gold, warrants, properties, bonds etc)
2006-07-14 19:34:40
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answer #2
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answered by Nicey8 5
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Go to wikipedia. It might help!
2006-07-14 19:32:32
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answer #3
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answered by Ed 3
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read Intelligent Investor or read www.investopedia.com
2006-07-14 19:43:39
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answer #4
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answered by tdsbu 2
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in detail ? you've gota be kidding.
2006-07-15 12:08:07
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answer #5
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answered by bajaexplorer 2
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FOOL
2006-07-20 00:52:29
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answer #6
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answered by Lilmisssassy 4
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