Mutual funds sell shares to savers and use the funds from those shares to purchase assets, such as stocks or bonds. This allows investors to diversify their portfolios and invest in a variety of assets without having to purchase them individually. Mutual funds do not take in deposits or make loans, nor do they bring together small savers and borrowers.

Solved

Mutual Funds

Question 50

Multiple Choice

Mutual funds

A) take in deposits from savers and make loans to borrowers.
B) sell shares to savers and purchase assets with the funds.
C) take in deposits from savers and purchase assets with the funds.
D) bring together small savers and small borrowers.

Correct Answer: