What Is the Primary Advantage of Mutual Funds

question 61

Multiple Choice

What is the primary advantage of mutual funds?

• A) They usually make a return that "beats the market."
• B) They allow people with small amounts of money to diversify.
• C) They provide customers with a medium of exchange.
• D) They allow investing in the venture capital industry.

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Definitions:

Compounded Quarterly

Compounded quarterly refers to the calculation and addition of interest to the principal sum of an investment or loan on a quarterly basis, accelerating the growth of the investment's value.

RRSP

A Registered Retirement Savings Plan is a Canadian account for holding savings and investment assets, aimed at retirement planning, with certain tax benefits.

Payments

Definition: The act of transferring money to settle a debt or account balance.

Compounded Annually

This refers to the process of applying interest to an initial amount and the accumulated interest from previous periods once every year.