Mutual funds arose to
A)reduce the transactions costs small savers incur when diversifying.
B)take advantage of the tax breaks the federal government grants for diversified portfolios.
C)provide home buyers with an inexpensive source of mortgage funds.
D)provide personal financial advice to small savers.

Question

Quizplus · Accepted Answer

Mutual funds enable small savers to diversify their investments without incurring high transaction costs. By pooling together money from multiple investors, the mutual fund can purchase a diversified portfolio at a lower cost than if each individual investor were to do it on their own. Additionally, the fund is managed by professional portfolio managers who have expertise in selecting and managing a range of investment options. Thus, mutual funds provide an efficient and low-cost way for small savers to invest in a diversified portfolio.

Mutual Funds Arose to