An Investment That Pools Together Investors' Money in Order to Buy

question 362

Multiple Choice

An investment that pools together investors' money in order to buy securities in many different companies or governments is a ___________.

• A) commercial fund.
• B) mutual fund.
• C) holding company.
• D) Public Investment Corporation.

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Definitions:

Financial Risk

Financial Risk refers to the possibility of losing money on financial investments or transactions due to market fluctuations, credit issues, or other factors.

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements.

Interest Tax Shield

A reduction in taxable income resulting from deductible interest expenses, typically from debts.

Tax Rate

The proportion of income or profits on which individuals or corporations pay taxes.