As a small investor, Bernie has decided to invest in the Alpha Fund. This mutual fund only invests in the common stock of companies located in the United States. One benefit of investing in mutual funds is:
A) all capital gains are guaranteed tax free.
B) they usually offer more diversification.
C) these funds are passive investments.
D) they are guaranteed by the SEC.

Question

Quizplus · Accepted Answer

One benefit of investing in mutual funds is that they usually offer more diversification compared to investing in individual stocks. This is because mutual funds invest in a portfolio of different securities, which helps spread out the risk among various companies and industries.

As a Small Investor, Bernie Has Decided to Invest in the Alpha