ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Stocks
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Bonds
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Mutual funds
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T-bills
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Detailed explanation-1: -You don’t need more than four to six schemes to diversify your portfolio. If you are investing a small amount, you don’t need to invest in more than one or two schemes. Investing in every mutual fund category will not offer you the best return or diversification.
Detailed explanation-2: -A mutual fund is a professionally managed fund that lets you pool your money with other investors to purchase a collection of securities-such as stocks and bonds-across multiple corporations or other issuers (government, investment trusts).
Detailed explanation-3: -Mutual funds typically allow investors to purchase fractional shares. If the NAV in the above example is $51, your $1, 000 will buy 19.6 shares.
Detailed explanation-4: -Most mutual funds fall into one of four main categories – money market funds, bond funds, stock funds, and target date funds.