How Mutual Funds Facilitate the Flow of Funds

Carson Company is considering a private placement of bonds with Venus Mutual Fund.

a. Explain the interaction between Carson and Venus. How would Venus serve Carsons needs, and how would Carson serve the needs of Venus?

b. Why does Carson interact with Venus Mutual Fund instead of trying to obtain the funds directly from individuals who invested in Venus Mutual Fund?

c. Would Venus Mutual Fund serve as a better monitor of Carson Company than the individuals who provided money to the mutual fund? Explain.