What is a mutual fund?
A) A mutual fund is a pool of funds established by corporate financial managers to provide for short-term business loans.
B) A mutual fund is a loan to the federal government made by a business firm.
C) Investors pool resources from individuals and business firms to purchase a portfolio of stocks, bonds, and short-term securities.
D) A mutual fund consists of money raised by selling a share of ownership in a business firm.
E) A mutual fund is a product of a mutual life company.

Question

Quizplus · Accepted Answer

A mutual fund is a type of investment vehicle where multiple investors pool their money together to purchase securities such as stocks, bonds, and short-term securities. The fund is managed by professional financial managers who allocate the investments within the fund to meet the stated objectives and investment strategies. Investors buy shares of the mutual fund, owning a portion of the overall investment portfolio. The value of these shares will fluctuate based on the underlying value of the securities in the portfolio.

What Is a Mutual Fund