Mutual funds are attractive because:

Question

Quizplus · Accepted Answer

Mutual funds provide investors with the opportunity to diversify their investments across a wide range of financial securities, including stocks, bonds, and other assets, at a lower cost than what most investors could obtain individually. This diversity helps to minimize the risk associated with concentrating investments in a single company or a single type of asset. However, mutual funds do not provide access to inside information or run the companies in which they invest, so options C and D are incorrect. Additionally, while some mutual funds may have the potential for high returns, this is not a defining characteristic of the mutual fund industry as a whole, so option A is also incorrect.

Mutual Funds Are Attractive Because