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Questions and Answers
Which of the following best describes a mutual fund?
Which of the following best describes a mutual fund?
- An individual investment in stocks or bonds
- A retirement portfolio managed by financial professionals
- A collective investment that pools money from multiple investors to purchase securities (correct)
- A diversified investment in a wide variety of investment types
What does it mean to purchase a share in a mutual fund?
What does it mean to purchase a share in a mutual fund?
- You become a diversified investor
- You become a partial owner of all the investments in the fund (correct)
- You become an individual investor in stocks or bonds
- You become a financial professional managing the fund
What is the benefit of investing in a mutual fund?
What is the benefit of investing in a mutual fund?
- It provides retirement income
- It guarantees high returns on investment
- It allows you to analyze individual stocks and create a diversified portfolio
- It allows you to participate in a wide variety of investment types (correct)
What is the role of financial professionals in managing mutual funds?
What is the role of financial professionals in managing mutual funds?
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How does a mutual fund provide diversification?
How does a mutual fund provide diversification?
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