Which of the following statements is TRUE?
I. A mutual fund pools money from many different investors and uses that money to invest in many different firms.
II. Mutual funds that are run by managers who try to pick the best performing stocks usually outperform the S&P 500.
III. Passive mutual funds do not try to select winning stocks; they mimic broader markets like the S&P 500.
A) I only
B) I and II only
C) I and III only
D) II and III only

Question

Quizplus · Accepted Answer

Statement I is true as mutual funds do pool money from many different investors to invest in multiple firms. Statement II is false as actively managed mutual funds do not always outperform the S&P 500. Statement III is true as passive mutual funds do not select winning stocks but rather mimic broader markets. Therefore, the best choice is C, which includes the two true statements.

Which of the Following Statements Is TRUE