Which of the following statements is most correct?
A)mutual fund shares are traded either on an organized exchange or in the over-the-counter market.
B)mutual funds continually sell shares to investors, and shareholders may sell their shares back to the mutual fund at any time.
C)mutual funds can only invest in equity.
D)all of the above statements are correct.
Not in the chapter

Question

Quizplus · Accepted Answer

Mutual funds are continuously offering and selling their shares to new investors, and shareholders can sell their mutual fund shares back to the mutual fund at any time. They are not restricted to investing only in equity and can also invest in fixed income securities, commodities, and other investments. The first statement (A) is partially correct, as mutual fund shares can be traded on an exchange or in the over-the-counter market, depending on the type of fund. However, this statement does not capture the continuous offering and selling of mutual fund shares. The statement in option (C) is incorrect, as mutual funds can invest in a variety of asset classes, not just equity.

Which of the Following Statements Is Most Correct