Suppose three friend are interested to invest in stock market but no one have any idea about stock market.They gave this money to one the friend's father who has good experience in stock market operation.The father invested this money in stock market and gave return plus capital to these three friend. This system is called Mutual Fund.
So the three friends are investor and the father is the mutual fund institution who took the money to invest in stock market.
Moral of story-Mutual fund is a vehicle by which you can invest your money in stock and debt market.
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