A Mutual Fund

question 18

Multiple Choice

A mutual fund:

• A)is a way of investing in a single stock.
• B)offers safety through diversification because a loss in one investment is usually offset by gains in other investments within the fund.
• C)is insured by the FDIC.
• D)is a form of an indirect real estate investment.
• E)is professionally managed so investors need not monitor fund results.

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Definitions:

Current Obligations

Obligations or liabilities that are due to be settled within one year, similar to current liabilities but emphasizes timely duty.

Times Interest Earned

A metric used to measure a company's ability to meet its debt obligations, calculated by dividing earnings before interest and taxes (EBIT) by interest expenses.

Interest Expense

The cost incurred by an entity for borrowed funds over a specific period, including loans, bonds, or lines of credit.