Which of the Following Are Advantages of Saving Your Money

question 263

Multiple Choice

Which of the following are advantages of saving your money in a mutual fund?
I. You have professional fund management.
II. Mutual funds have always outperformed the S&P 500.
III. People with smaller amounts of money can diversify risk.

• A) I only
• B) I and II only
• C) I and III only
• D) I, II, and III

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Definitions:

Favorable Variances

Differences between actual and budgeted financial performance that result in a better-than-expected financial position.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, providing a more useful tool for performance evaluation.

Variable Costs

Costs that vary directly with the level of production or business activity. Examples include raw materials, packaging, and direct labor.

Fixed Costs

Fixed Costs are business expenses that remain constant regardless of the volume of goods or services produced, such as rent, salaries, and loan payments.