When an investor purchases shares in a no-load common stock mutual fund, she is using a(n)

Question

Quizplus · Accepted Answer

When an investor purchases shares in a no-load common stock mutual fund, she is using a financial intermediary, as the mutual fund serves as a middleman between the investor and the underlying stocks in the portfolio. The other answer choices are not applicable in this scenario: A) primary intermediary typically refers to firms such as investment banks that directly participate in issuing new securities, B) over-the-counter market refers to a decentralized trading platform for securities that are not listed on formal exchanges, and D) a broker is a person or firm that executes trades on behalf of clients but is not involved in the management of a mutual fund.

When an Investor Purchases Shares in a No-Load Common Stock