A Benefit of Mutual Funds That Mainly Buy Stocks and Hold

question 67

Multiple Choice

A benefit of mutual funds that mainly buy stocks and hold them is that

• A)the price of the stocks they hold always appreciate.
• B)dividend payments on such stocks are not taxed.
• C)they help avoid taxes as the capital gains on these stocks are implicit.
• D)​they promise annual returns of more than 50% of the principal amount.

---

Definitions:

Linear Effects

Phenomena or changes that are directly proportional to the changes in an independent variable, showing a straight-line relationship in graphical representations.

Worst Predictor

A variable or factor that provides little to no useful information in forecasting or predicting outcomes.

Linear Effects

The impact on a dependent variable that is proportional to the change in an independent variable, suggesting a straight-line relationship in a statistical model.

Months Of Service

The total number of months an individual has worked or served in a particular job or capacity.