Which One of the Following Is a True Statement

question 18

Multiple Choice

Which one of the following is a true statement?

• A)Professional management is an especially important factor for investors purchasing a mutual fund.
• B)The only reason investors purchase mutual funds is the high growth expected.
• C)While mutual funds may experience loss, your original investment is guaranteed.
• D)Mutual funds are all designed to appeal only to conservative investors.
• E)The responsibility for choosing the right mutual fund is based on the professional manager's evaluation.

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Definitions:

Common Stock

An equity security that represents ownership in a corporation, entitling shareholders to a share of the company's profits through dividends.

Dividends

Payments made by a corporation to its shareholder members from its profits.

Net Income

The amount of money a company effectively earns as profit after reducing its revenue by expenses and taxes.

Trial Balance

A worksheet for accounting where the total balances of all ledgers are arranged into equal debit and credit columns.