Which of the following statements about mutual funds is correct?
A)A mutual fund is a financial intermediary.
B)A mutual fund acquires its funds primarily by selling shares to the public.
C)People who buy shares from a mutual fund accept all of the risk and return associated with the mutual fund's portfolio.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

A) A mutual fund pools money from many investors and acts as a financial intermediary by investing that money in a portfolio of securities such as stocks, bonds, or other assets.
B) A mutual fund acquires its funds by selling shares to the public. The pool of money generated from the sale of these shares is used by the mutual fund to invest in a portfolio of securities.
C) When people buy shares from a mutual fund, they are investing in the fund's portfolio of securities; thus, they accept all of the risk and return associated with the fund's investments.

Which of the Following Statements About Mutual Funds Is Correct