Question

If a person invests in the stock market through a firm that pools funds from a large number of people and buys and professionally manages stock from a number of diversified companies, that person is investing in a(n)
A. certicate of deposit.

B. individual retirement account.

C. mutual fund.

D. banker’s acceptance.

E. time deposit.

Answer 1

Answer:

C. mutual fund.

Explanation:

Mutual fund refers to a company that pools money from many investors into securities such as stocks and bonds. Mutual funds provide the service of a deversified portfolio for customers who would otherwise been unable to diversify their portfolio themselves.