What is the purpose of a mutual fund?A. Guaranteeing a fixed return on investmentB. Pooling money from multiple investors to invest in a diversified portfolioC. Trading individual stocks on behalf of investorsD. Investing only in government bonds
B. Pooling money from multiple investors to invest in a diversified portfolio
The purpose of a mutual fund is to collect money from multiple investors and invest that money in a diversified portfolio of stocks, bonds, or other securities. This allows individuals to invest in a wide range of assets, even if they have limited funds to invest on their own. Mutual funds are managed by professional money managers who make investment decisions on behalf of the investors in the fund.