Which of the following is true about the mutual fund?
A) It provided a sense of security to investors because of the variety of stocks in each fund.
B) Early mutual funds lacked any form of professional management.
C) A fund singled out one particular stock at a time.
D) The mutual fund tended to put the risk on managers and protected owners.
E) Mutual funds prevented a rush of cash boosting scores at Wall Street and for that reason were responsible for the sound economic climate.

Question

Quizplus · Accepted Answer

The statement "It provided a sense of security to investors because of the variety of stocks in each fund" is true about mutual funds. They offer diversification by investing in a variety of stocks, which helps to mitigate risk for investors.

Answer: B and D are false, C and E are irrelevant to the definition of mutual fund.

Which of the Following Is True About the Mutual Fund