A Mutual Fund Is a Good Way for an Investor

question 241

Multiple Choice

A mutual fund is a good way for an investor to diversify in investment because:

• A) a mutual fund consists of a large number of stocks so the cost of buying all of them at the same time is lower.
• B) when the prices of risky stocks go up, the prices of less risky stocks must go down.
• C) not all stock prices move up or down at the same time.
• D) there are many buyers of a mutual fund so that the risk is spread across all the buyers.

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