A major benefit of investing in mutual funds is:
A)Reducing the Beta of the investment portfolio
B)Increasing the Beta of the investment portfolio
C)Low cost reduction of exposure to unique risks
D)The elimination of market risk

Question

Quizplus · Accepted Answer

Investing in mutual funds allows for diversification among multiple securities, which can lower the exposure to unique risks specific to individual securities. Additionally, mutual funds typically have lower fees than actively managed portfolios, which can make them a cost-effective way to invest in a diversified portfolio. However, mutual funds do not eliminate market risk or necessarily impact the overall beta of a portfolio.

A Major Benefit of Investing in Mutual Funds Is