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Mutual Funds

century, the high-definition and digital television broad- types of businesses and industries. As technology
casting being introduced will change the standards; pic- improves, so will the applications of multimedia.
tures will have better quality because of an increase in the SEE ALSO Information Technology; Office Technology
number of pixels and a change in the aspect ratio of the
picture.
More expensive tuner and capture cards on comput- BIBLIOGRAPHY
Long, L., and Long, N. (2002). Computers information technol-
ers allow for “full-motion” capture by saving all of the
ogy in perspective. Upper Saddle River, NJ: Pearson Educa-
frames and sound. Because these files become very large tion.
(640 ¥ 480 pixels per frame times 30 frames per second— Oz, Effy (2004). Management Information Systems (3rd ed.).
over 9 million characters for 1 second), several methods Boston: Course Technology.
have been developed for compressing motion video files.
Shelly, Gary B., Cashman, Thomas J., and Vermaat, Misty E.
Video is compressed to save it as a smaller file and is (2003). Discovering computers 2004: A gateway to information.
decompressed during playback. Several codec systems use Boston: Course Technology.
hardware including computer chips and software such as
MPEG (Motion Picture Experts Group). Since video files
are large, they are usually brief recordings or clips from George A. Mundrake
video. The clips are used in business presentations, on
Web pages, as product descriptions, or as other media
bytes to emphasize an important point in a short time.
Advances in storage capacity and speed of newer storage MUTUAL FUNDS
media will eventually allow for smoother and longer clips. Mutual funds belong to a group of financial intermedi-
Video streaming from Web sites stores large video clips on aries known as investment companies, which are in the
the host Web site and allows the video to “stream” in business of collecting funds from investors and pooling
smaller segments to the Internet user. them for the purpose of building a portfolio of securities
according to stated objectives. They are also known as
open-end investment companies. Other members of the
ANIMATION AND VIRTUAL
group are closed-end investment companies (also known
REALITY
as closed-end funds) and unit investment trusts. In the
The most sophisticated forms of multimedia are anima- United States, investment companies are regulated by the
tion and virtual reality. These systems combine still graph- Securities and Exchange Commission under the Invest-
ics, video, sound, and animation to form virtual-reality
ment Company Act of 1940.
outcomes. Industries using this technology include enter-
tainment, education and training, legal, architecture and Mutual funds are generally organized as corporations
construction, government, and transportation. Animated or trusts, and, as such, they have a board of directors or
trustees elected by the shareholders. Almost all aspects of
(anime) movies and computer games have become popu-
lar and require all of the multimedia formats for develop- their operations are externally managed. They engage a
ment. management company to manage the investment for a
fee, generally based on a percentage of the fund’s average
Working with virtual reality requires powerful com- net assets during the year. The management company may
puters and software to collect, edit, and produce the prod- be an affiliated organization or an independent contractor.
uct or title or presentation. Some examples include
They sell their shares to investors either directly or
computer games, computer-assisted design, home-
through other firms such as broker-dealers, financial plan-
improvement software that allows users to design and dis- ners, employees of insurance companies, and banks. Even
play a proposed project in 3-D, flight simulators, and the day-to-day administration of a fund is carried out by
simulation of a crash for accident investigation.
an outsider, which may be the management company or
an unaffiliated third party.
SUMMARY
The management company is responsible for select-
Figure 1 summarizes how elements of multimedia are ing an investment portfolio that is consistent with the
linked to a computer system to develop multimedia appli- objectives of the fund as stated in its prospectus and man-
cations. Once in a computer (digitized), each element can aging the portfolio in the best interest of the shareholders.
be used with software to manipulate media files into a The directors of the fund are responsible for overall gov-
multimedia system. ernance of the fund; they are expected to establish proce-
Multimedia systems can be applied to all organiza- dures and review the performance of the management
tional levels and functional areas of a company and across company and others who perform services for the fund.

530 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION