Mutual funds have:
A) been created for very wealthy individuals with a lot of money to invest.
B) increased the risks associated with constructing a portfolio.
C) reduced the costs associated with gathering information on stocks and bonds.
D) increased the transactions costs associated with participating in financial markets.

Question

Quizplus · Accepted Answer

Mutual funds pool money from many investors to invest in a diversified portfolio of stocks, bonds, and other securities. This diversification reduces the costs associated with gathering information on individual stocks and bonds, making it possible for smaller investors to gain access to a diversified portfolio with lower costs. Therefore, mutual funds have reduced the costs associated with gathering information on stocks and bonds.

Mutual Funds Have