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Meghan Buys Mutual Funds That Allow Her to Buy Smaller

Question 27

Multiple Choice

Meghan buys mutual funds that allow her to buy smaller stakes in more companies. Which of the following statements is true of her approach to investment?


A) It is much safer than buying only bonds or savings accounts.
B) It reduces Meghan's risks by spreading investment capital across a range of possibilities.
C) It provides potentially lower returns as compared with the returns obtained from investing solely in bonds and savings accounts.
D) It is the same as investing in exchange-traded funds

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