Small savers who only have enough money to buy a few individual financial assets can use ________ to diversify.

Question

Quizplus · Accepted Answer

Mutual funds allow small savers to invest in a diversified portfolio of financial assets without needing to purchase multiple individual assets themselves. This spreads out risk and can potentially lead to more stable returns. Option A and B only allow for investment in one company's stock or bond, respectively, which can be risky if that company fails. Treasury securities (option C) offer low risk but relatively low returns, and do not provide the benefits of diversification.

Small Savers Who Only Have Enough Money to Buy a Few