Mutual funds were created ________.
A)in order to provide insurance to all households
B)in order to limit interest rates that are paid on deposits
C)to pool the savings of small investors and use the proceeds to invest on their behalf
D)A and B only

Question

Quizplus · Accepted Answer

Mutual funds were created to pool the savings of small investors and use the proceeds to invest on their behalf, providing them with an opportunity to diversify their investments and gain exposure to various assets without having to make large individual investments. Option A is incorrect because mutual funds are not meant to provide insurance; they are an investment product. Option B is also incorrect because mutual funds do not directly limit interest rates on deposits; this is the role of central banks and other regulatory bodies.

Mutual Funds Were Created ________