Investment Purpose and Importance Quiz
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Questions and Answers

What is the correct way to describe investing in a mutual fund?

  • Investing in traditional investment instruments
  • Investing directly in mutual funds
  • Investing in mutual fund schemes (correct)
  • Investing in mutual fund management companies

How is investing in mutual funds different from investing directly in traditional instruments?

  • Getting a different product
  • Portfolio diversification (correct)
  • Competing with equity shares
  • Access to professional fund management services

In what way does an investor benefit from investing through a mutual fund according to the text?

  • Access to professional fund management services (correct)
  • Becoming a competitor to asset management companies
  • Avoiding portfolio diversification
  • Getting different investment products

What is one of the key advantages of investing in a mutual fund scheme compared to traditional instruments?

<p>Professional way of investing (A)</p> Signup and view all the answers

Which statement best describes the relationship between mutual fund schemes and traditional investment instruments?

<p>Mutual funds provide access to those instruments (A)</p> Signup and view all the answers

What does an investor actually invest in when participating in a mutual fund scheme?

<p>Equities, bonds, money market instruments, and other securities (B)</p> Signup and view all the answers

How would you differentiate between 'investing in mutual funds' and 'investing through mutual funds'?

<p>'Investing through mutual funds' better reflects the actual process (D)</p> Signup and view all the answers

What feature makes investing through a mutual fund scheme attractive for investors?

<p>'Access to securities otherwise unavailable' (D)</p> Signup and view all the answers

'Investing in a mutual fund scheme' provides investors with access to:

<p>'Equities, bonds, money market instruments, and other securities' (D)</p> Signup and view all the answers

'Investing through a mutual fund scheme' primarily offers investors:

<p>'Professional fund management services' (A)</p> Signup and view all the answers

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