Mutual Funds

question 29

Multiple Choice

Mutual funds

• A) pool the resources of many small investors by selling these investors shares and using the proceeds to buy securities.
• B) allow small investors to obtain the benefits of lower transaction costs in purchasing securities.
• C) provide small investors a diversified portfolio that reduces risk.
• D) do all of the above.
• E) do only A and B of the above.

---

Definitions:

Natural Resources

Raw materials and components found in nature that can be used to produce goods and provide services, such as water, forests, and minerals.

Scarcer Over Time

indicates that a resource or good is becoming less available or more difficult to obtain as time progresses.

Saving Rate

The proportion of income that is not spent, but instead saved by individuals, households or the nation as a whole.

Productivity

measures the efficiency of production in terms of the amount of output generated per unit of input, such as labor or capital.