A mutual fund
A)is a financial market where small firms mutually agree to sell stocks and bonds to raise funds.
B)is funds set aside by local governments to lend to small firms who want to invest in projects that are mutually beneficial to the firm and community.
C)sells stocks and bonds on behalf of small and less known firms who would otherwise have to pay high interest to obtain credit.
D)is an institution that sells shares to the public and uses the proceeds to buy a selection of various types of stocks,bonds,or both stocks and bonds.

Question

Quizplus · Accepted Answer

A mutual fund is an institution that pools money from multiple investors and uses that money to buy a selection of various types of stocks, bonds, or both stocks and bonds. The money raised from selling shares to the public is used to buy a diversified portfolio of investments. The investors then own a portion of the mutual fund and share in the gains and losses of the fund's investments.

A Mutual Fund