Question
What is the purpose of a mutual fund?
A. Guaranteeing a fixed return on investment
B. Pooling money from multiple investors to invest in a diversified portfolio
C. Trading individual stocks on behalf of investors
D. Investing only in government bonds
A. Guaranteeing a fixed return on investment
B. Pooling money from multiple investors to invest in a diversified portfolio
C. Trading individual stocks on behalf of investors
D. Investing only in government bonds
Answers
GPT-4o mini
The correct answer is **B. Pooling money from multiple investors to invest in a diversified portfolio**.
Mutual funds are designed to gather money from various investors and invest it collectively in a diversified range of securities, which can include stocks, bonds, and other assets, to minimize risk and potentially enhance returns.
Mutual funds are designed to gather money from various investors and invest it collectively in a diversified range of securities, which can include stocks, bonds, and other assets, to minimize risk and potentially enhance returns.