Which one of the following statements is not characteristic of mutual funds?

A. They are always considered to be financial institutions.

B. They raise money by selling shares to investors.

C. They pool the savings of many investors.

D. They offer professional management and portfolio diversification.

Question

Jarvis

Business

7 January, 16:08

Which one of the following statements is not characteristic of mutual funds?

A. They are always considered to be financial institutions.

B. They raise money by selling shares to investors.

C. They pool the savings of many investors.

D. They offer professional management and portfolio diversification.

+3

Answers (1)

Know the Answer?

Phillip Buck · Answer 1

Answer: Option A

Explanation: Mutual funds are introduced by the financial institutions in the market and are not financial institutions themselves.

These funds collect money from various different investors and pool them together to invest in securities of different companies. These funds are managed by the investment professionals who receive both fixed and variable fees depending on the performance of portfolio.

The portfolio is divided into shares and such shares are then sold into the stock market.

Hence from the above we can conclude that option A.

Which one of the following statements is not characteristic of mutual funds?A. They are always considered to be financial institutions.B. They raise money by selling shares to investors.C. They pool the savings of many investors.D. They offer professional management and portfolio diversification.