Mutual funds are investment companies that pool funds from a large number of investors and use the funds to purchase various types of financial assets, such as stocks and bonds. The investors in the mutual fund then own a portion of the portfolio of assets held by the fund, and the returns earned by the fund are distributed among the investors according to their holdings.

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Mutual Funds _____

Question 28

Multiple Choice

Mutual funds _____.

A) are depository institutions that are owned by its depositors, who are often members of a common organization or association
B) are investment companies that use funds provided by savers to buy various types of financial assets, including stocks and bonds, in the financial markets
C) cater to savers, especially individuals who have relatively small savings or need long-term loans to purchase houses
D) are organizations that distribute new issues of securities for corporations
E) are groups of investment banking firms formed to spread the risk associated with the purchase and distribution of a new issue of securities

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