Which of the Following Is Not a Benefit to an Individual

question 72

Multiple Choice

Which of the following is not a benefit to an individual purchasing a mutual fund?

• A) Reduced risk
• B) Lower transactions costs
• C) Free-riding
• D) Diversification

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Definitions:

Bond Payable

A long-term debt instrument issued by corporations or governments to raise capital, with the obligation to pay back with interest.

Discount on Bonds Payable

The difference when a bond is issued for less than its face value or nominal value.

Bond Interest Expense

The cost incurred by an issuer of bonds due to the interest payments made to bondholders.

Tax Deductible

Expenses that can be subtracted from gross income to reduce taxable income.