ACCA Financial Management (F9) Certification Practice Exam

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Prepare for the ACCA Financial Management (F9) Certification Exam with engaging quizzes and interactive content. Dive deep into financial management concepts and boost your exam confidence with questions that come with detailed explanations.

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What are institutional investors characterized by?

Individuals with small capital investment
Entities with substantial funds for investment
Hoteliers and real estate moguls
Non-profit organizations seeking funds

The correct answer is: Entities with substantial funds for investment

Institutional investors are characterized by their ability to manage large amounts of capital, typically because they operate as organizations rather than individuals. This can include entities such as pension funds, insurance companies, mutual funds, and endowments, all of which collectively hold substantial financial assets. Their investment leverage allows them to influence markets significantly, and they often have the expertise and resources to conduct thorough research and analysis in their investment decisions. The presence of substantial funds enables institutional investors to negotiate better terms for investments, access exclusive opportunities, and diversify their portfolios effectively compared to individual investors. While some options present various investor types, the defining feature of institutional investors is precisely this capacity for significant capital investment, which sets them apart in the financial landscape.