Which of the following statements about mutual funds is correct?
A)A mutual fund is not a financial intermediary.
B)A disadvantage of buying mutual funds is a lack of diversification
C)People who buy shares from a mutual fund are guaranteed a minimum return.
D)On average index funds outperform managed funds.

Question

Quizplus · Accepted Answer

On average, index funds tend to have lower fees and expenses than managed funds while still providing a diversified portfolio. Additionally, index funds are not subject to the potential underperformance of active fund managers, making them a preferred choice by many investors. However, it is important to note that this statement does not apply to all individual cases and that past performance is not a guarantee of future results.

Which of the Following Statements About Mutual Funds Is Correct