A(n)_____ Allows for Diversification by Pooling the Capital of Many

question 7

Multiple Choice

A(n) _____ allows for diversification by pooling the capital of many investors in order to purchase more securities and reduce the risk of the investment portfolio

• A)Exchange traded security.
• B)Mutual fund.
• C)Margin Account.
• D)myIRA.

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Definitions:

Budget Constraint

The limit on the consumption patterns of individuals or entities, based on their income and the prices of goods and services.

Marginal Utility

The additional satisfaction or utility received by consuming an additional unit of a good or service.

Marginal Utility

The additional satisfaction or utility that a person receives from consuming one additional unit of a good or service.

Budget Line

A graphical representation of all possible combinations of two goods or services that can be purchased with a given budget.