A mutual fund: Question 35 options: is a way of investing in a single stock. poo

Question

A mutual fund:

Question 35 options:

is a way of investing in a single stock.

pools the money of many investors—its shareholders—to invest in a variety of securities.

is insured by the FDIC.

is a form of an indirect real estate investment.

is professionally managed so investors need not monitor fund results.

A municipal bond fund:

Question 36 options:

is too risky for most investors.

provides investors with federally tax-free interest income.

invests in bonds that are backed by the federal government.

is a risk-free investment.

invests solely in Treasury bonds.

is a way of investing in a single stock.

pools the money of many investors—its shareholders—to invest in a variety of securities.

is insured by the FDIC.

is a form of an indirect real estate investment.

is professionally managed so investors need not monitor fund results.

A municipal bond fund:

Question 36 options:

is too risky for most investors.

provides investors with federally tax-free interest income.

invests in bonds that are backed by the federal government.

is a risk-free investment.

invests solely in Treasury bonds.

Explanation / Answer

Question 35:

Option b is correct.

A mutual fund is a type of indirect investing wherein a pool of investors put their money in a fund. The fund manager who is a professional in managing money invest the fund in various assets like stocks, debt instruments etc. It is not insured by FDIC.

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