The collapse of the long term capital management hedge fund in 1998 was a case of an extremely unlikely statistical event called a tail event.
What are funds?
- A fund is a collection of funds set aside for a certain objective.
- A fund can be created for a variety of objectives, such as the construction of a new civic center by the municipal government, the awarding of scholarships at a college, or the payment of customer claims by an insurance company.
- Funds are used by people, companies, and governments to save money.
- To cover unforeseen costs, people may create an emergency fund, often known as a rainy-day fund, or a trust fund to save money for a particular person.
- Money can be invested by both individual and institutional investors in various funds with the intention of making money.
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