Which of the Following Pools Money from Large Numbers of Individual

question 158

Multiple Choice

Which of the following pools money from large numbers of individual investors and invests these funds in a variety of stocks, bonds, government securities, and other assets, with each individual investor sharing in the earnings in proportion to the amount contributed?

• A) mutual funds
• B) debentures
• C) preferred stocks
• D) stock indexes

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Definitions:

Evaluating Management

The process of assessing the effectiveness of a company's management team in achieving business goals and strategies.

Forecasting Profits

The process of estimating the future financial performance of a company, specifically regarding its profits.

Risk

The potential for loss or the chance that an investment's actual return will differ from the expected return, including the possibility of losing some or all of the original investment.

Return

In finance, return refers to the profit or loss generated on an investment over a specific period.