Question

What organization is appointed by a mutual fund corporation to collect money received from the fund's buyers and from portfolio income and arranges for cash distributions through dividend payments, portfolio purchases and share redemptions?

Answer 1

A transfer agent is appointed by a mutual fund to manage financial transactions, including fund collection, income processing, and distributions such as dividends.

Step-by-step explanation:

The organization appointed by a mutual fund corporation to handle financial transactions is known as a transfer agent. This entity is responsible for collecting and disbursing funds, including money received from the fund's buyers, portfolio income, dividend payments, and handling share redemptions and portfolio purchases. Mutual funds simplify the investment process by pooling money from many investors to purchase a diversified group of stocks or bonds, offering liquidity and professional management to optimize returns while controlling risk.