Mutual funds typically offer moderate risk since they are composed of different types of assets that are diversified. The diversification across various securities helps to mitigate the risk compared to investing in individual stocks. However, the level of risk can vary depending on the specific mutual fund and its investment strategy, such as whether it focuses on stocks, bonds, or a blend of both. Overall, while they are generally seen as a more balanced option for investors, there is still an inherent level of risk involved.
Explain what an investment in a mutual fund offers in terms of risk.(1 point)
Responses
Mutual funds offer moderate risk since they are composed of different types of assets that are diversified.
Mutual funds offer moderate risk since they are composed of different types of assets that are diversified.
Mutual funds offer high risk since they include the purchase of stocks, which are extremely volatile.
Mutual funds offer high risk since they include the purchase of stocks, which are extremely volatile.
Mutual funds offer moderate risk since they are funded by pooled resources from many different investors.
Mutual funds offer moderate risk since they are funded by pooled resources from many different investors.
Mutual funds offer low risk since they are funded by pooled resources from many different investors.
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