Which of the Following Is Not True of Mutual Funds

question 115

Multiple Choice

Which of the following is not true of mutual funds?

• A)Mutual funds range from very conservative to extremely speculative investments.
• B)They do not offer diversification.
• C)They can be used for retirement accounts.
• D)This investment provides professional management.
• E)A mutual fund pools the money from many investors.

---

Definitions:

Systematic Factors

Factors that affect the entire market or a large segment of the market, such as economic, political, or social changes.

Expected Inflation

The anticipated rate at which the general level of prices for goods and services will rise over a period, eroding purchasing power.

Lintner

Lintner refers to John Lintner, an economist known for his work on the dividend policy of firms and contributions to the capital asset pricing model (CAPM).

Miller and Scholes

Refers to Merton Miller and Myron Scholes, economists recognized for their work in finance, including the development of the Black-Scholes model for option pricing.