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custodian of a mutual fund safeguards the fund's money and other physical
This party is usually a bank. In addition to ensuring that assets
are in safe keeping, the custodian takes care of bookkeeping and other clerical
The custodian takes in investors' payments and holds the fund
shares (as an accounting book entry). The custodian may also calculate the net
asset value of the fund's shares at the end of each day.
To make sure that there is no conflict of interest or illegal
activity, the fund chooses an independent party to be the custodian. This party
takes no part in the fund's investment decisions.
Next, we will look at the transfer