A Stock Mutual Fund's Primary Advantage Is to Allow

question 59

Multiple Choice

A stock mutual fund's primary advantage is to allow

• A) investors to diversify away systematic risk.
• B) investors to diversify away all risk.
• C) investors to diversify away idiosyncratic risk.
• D) the rich to avoid taxes.

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Definitions:

Rate of Inflation

The percentage increase in the general level of prices for goods and services in an economy over a period of time.

Unemployment Rate

The percentage of the labor force that is jobless and actively looking for employment.

Predict

The act of forecasting future values or outcomes based on historical data or trends.

Graphical Display

The visual representation of data or information, typically in the form of charts, graphs, or tables.