Question

Mutual funds pool deposits from investors to purchase securities. What is true about mutual funds? A) Mutual funds cannot be bought in retirement accounts. B) Investors do not have to pay taxes on gains from mutual funds. C) Mutual funds are typically less safe than Certificates of Deposit. D) You can invest in mutual funds only when you pass your 18th birthday.

Answer 1

Answer:

C) Mutual funds are typically less safe than Certificates of Deposit.

Explanation:

Investment opportunities involve different types of risks. More risky applications such as mutual funds often offer the possibility of higher returns. Other, less risky applications such as certificates of deposit offer lower pay. The difference between the two is that in the case of the fund, your money will be invested in a variety of financial market stocks that may depreciate for some structural market reason. Instead, certificates of deposit will be protected by banks, which pose lower risks than stocks. You will only lose your money if the bank goes bankrupt, which is much harder to do than financial market stocks devalue.

Answer 2

The answer is "C) Mutual funds are typically less safe than Certificates of Deposit".

Mutual funds are regularly depicted as pooled speculations. At the point when a financial specialist purchases the mutual funds the cash is pooled with that of different speculators whose objectives are comparative. An expert store administrator utilizes this cash to purchase stocks, securities, or currency showcase instruments that make up the reserve's arrangement of ventures.  

A certificate of deposit is a consent to store cash for a settled period with a bank that will pay you premium. You can contribute for three months, a half year, one year or five years.