Who accepts all of the risk associated with a mutual fund's portfolio of stocks and/or bonds?
A)the fund's managers
B)the fund's shareholders
C)the federal government
D)the corporations that originally issued the stocks and/or bonds held by the fund

Question

Quizplus · Accepted Answer

The shareholders of a mutual fund collectively accept all of the risk associated with the fund's portfolio of stocks and/or bonds. This is because they are the ones who have invested their money in the fund and are therefore directly impacted by any gains or losses associated with the fund's performance. The fund's managers may make decisions regarding which securities to include in the portfolio, but ultimately it is the shareholders who bear the brunt of any risks associated with those investments. The federal government and the corporations that issued the securities held by the fund are not directly responsible for any risks associated with the fund's investments.

Who Accepts All of the Risk Associated with a Mutual