Which one of the following would best describe a mutual fund?
A) an investment that is available at many banks and is FDIC insured
B) a company that manages a portfolio that is purchased by pooling the money of its investors
C) a debt contract that is issued by a company and offers interest payment on the loan
D) ownership of shares in a corporation with no guarantee the company will be proﬁtable

Question

Quizplus · Accepted Answer

A mutual fund is a type of investment company that pools money from multiple investors to purchase a portfolio of stocks, bonds, or other securities. The fund is managed by a professional investment team, who make decisions about which securities to buy and sell in order to achieve the fund's investment objectives. The investors in the mutual fund own shares of the fund, which represent a portion of the overall portfolio.

Which One of the Following Would Best Describe a Mutual