BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

BUSINESS MATHEMATICS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
By investing in many companies, mutual funds decrease the ____ of the investment.
A
Profit
B
Premium
C
Amount
D
Risk
Explanation: 

Detailed explanation-1: -Mutual funds tend to be less risky than individual stocks, because they are more diversified-meaning they contain a mix of investments. However, they do still carry risk, because the shares can lose value if the underlying companies, or the market, face financial difficulties.

Detailed explanation-2: -STANDARD RISK FACTORS Mutual Fund Schemes are not guaranteed or assured return products. Investment in Mutual Fund Units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal.

Detailed explanation-3: -All investments carry some risk, but mutual funds are typically considered a safer investment than purchasing individual stocks. Since they hold many company stocks within one investment, they offer more diversification than owning one or two individual stocks.

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