Which of the Following Statements About Balanced Funds Is True

question 73

Multiple Choice

Which of the following statements about balanced funds is true?

• A) Balanced funds are most suitable for investors who can tolerate risk and price volatility.
• B) Balanced funds put most of their money into equities.
• C) Balanced funds are viewed by many high-income investors as a type of tax-sheltered investment.
• D) Balanced funds generally keep 30% to 40% of their portfolios in bonds.
• E) Balanced funds look for stocks with relatively low price/earnings (P/E) ratios, high dividend yields, and moderate amounts of financial leverage.

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Definitions:

Profit

The financial gain realized when the revenue from selling goods or services exceeds the cost of production.

Marginal Cost

Incremental expenditure incurred by manufacturing an additional unit of a product or service.

Selling Price

The price at which a product or service is sold to customers.

Marginal Cost

Expenditure incurred in producing an additional unit of a good or service.