Which of the Following Is Not True Regarding Mutual Funds

question 28

Multiple Choice

Which of the following is not true regarding mutual funds?

• A)They are a key financial intermediary.
• B)They provide an important service to individual investors seeking to invest funds.
• C)Most mutual funds use experienced portfolio managers, so investors do not have to manage the portfolio themselves.
• D)They provide a way for individual investors to diversify, but most individual investors are unable to afford the purchase of mutual fund shares.
• E)They may offer various services, such as checkwriting privileges.

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Definitions:

Prior Probabilities

The probabilities assigned to outcomes based on prior knowledge before any new evidence is considered.

Posterior Probabilities

Calculated probabilities updated to reflect new, relevant information, usually in the context of Bayesian inference.

Prior Probabilities

Prior probabilities are the probabilities of events before any new evidence is considered, often serving as the initial belief in Bayesian statistics.

Conditional Probabilities

The probability of an event occurring given that another event has already occurred, reflecting the dependence between events.