ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Mutual funds are speculative investments
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Mutual funds are diversified investments
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Mutual funds are a form of real estate investment
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Mutual funds are superior purchasing to a single stock
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Detailed explanation-1: -Each investor owns shares of the fund and can buy or sell these shares at any time. Mutual funds are typically more diversified, low-cost, and convenient than investing in individual securities, and they’re professionally managed.
Detailed explanation-2: -Explanation: Statement 1 is correct: A mutual fund collects money from investors and invests on their behalf. Mutual funds are considered an ideal investment avenue for regular investors who are less aware of investing surplus funds.
Detailed explanation-3: -Which of the following statements about diversification is TRUE? Diversification is an investment strategy that mixes a wide variety of investments from different categories within a portfolio.
Detailed explanation-4: -A diversified equity fund invests in companies regardless of size and sector. It diversifies investments across the stock market in a bid to maximize gains for investors. They are offered by unit-linked insurance plans / ULIPs, mutual funds and other investment firms.