Which of the Following Is Not True Regarding Mutual Funds

question 25

Multiple Choice

Which of the following is not true regarding mutual funds?

• A) They are a key financial intermediary.
• B) They provide an important service to individual investors seeking to invest funds.
• C) Most mutual funds use experienced portfolio managers, so investors do not have to manage the portfolio themselves.
• D) They provide a way for individual investors to diversify, but most individual investors are unable to afford the purchase of mutual fund shares.

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Definitions:

Absolute Value

The non-negative value of a number without regard to its sign; for example, the absolute value of both -5 and 5 is 5.

Variance

A statistical measure that represents the degree of spread or variability of a data set, by calculating the average of the squared differences from the mean.

Standard Deviation

A measure of the dispersion or variability within a dataset, indicating how much the individual data points deviate from the mean.

Variance

A measure of variability that describes the spread of a set of data points or the degree of dispersion around the mean.