Which of the Following Statements About Mutual Funds Is Correct

question 16

Multiple Choice

Which of the following statements about mutual funds is correct?

• A)A mutual fund is not a financial intermediary.
• B)A disadvantage of buying mutual funds is a lack of diversification
• C)People who buy shares from a mutual fund are guaranteed a minimum return.
• D)On average index funds outperform managed funds.

---

Definitions:

Production Alternative D

A hypothetical option in a decision-making process for producing goods or services, often characterized by differences in technology, labor, or resources.

Production Alternative C

A specific choice or option in the array of possible production strategies or methods, typically designated in a scenario or case study.

Growth Rate

The proportional increase of some variable within a specific time period, often expressed as a percentage.

Law of Increasing Opportunity Costs

States that as production of a product increases, the cost to produce an additional unit of that product also increases. This is due to resources typically not being equally efficient in producing every good.