What type of financial institution raises money from investors by selling shares?

Question

Quizplus · Accepted Answer

A mutual fund is a type of financial institution that raises money from investors by selling shares. Investors pool their money together to buy a portfolio of stocks, bonds, or other securities. The value of their investment is based on the performance of the underlying assets. The mutual fund is managed by a professional investment manager who makes decisions on what to buy and sell.

The other options (B, C, and D) are not correct because:
- Property and liability insurance companies raise money by selling insurance policies, not shares.
- Credit unions are member-owned financial cooperatives that offer loans and other financial services to their members, but they do not sell shares to raise money from investors.
- Pension funds are set up by employers to provide retirement benefits to employees. They are funded by contributions from both the employer and employee, but they do not sell shares to investors outside of the pension plan.

What Type of Financial Institution Raises Money from Investors by Selling