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</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</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</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</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'</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'</p> Signup and view all the answers

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

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

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