Advantages of mutual funds include

Question

Quizplus · Accepted Answer

The correct option is B- Efficient diversification. Mutual funds offer a level of diversification that a single investor cannot achieve. By pooling the funds of several investors, mutual funds can purchase a wide range of securities across industries, asset classes, and geographies, thus reducing the risk of financial losses. Option A is false as mutual funds do not necessarily outperform the market on average. Option C is also false as mutual funds carry varying levels of risk and investment objectives, and the level of risk depends on the specific fund.

Advantages of Mutual Funds Include