Question

what is a mutual fund?
choose the correct answer below
a. a mutual fund is a group of stocks and/or bonds managed by a professional investor. your money is combined with the money of other investors in the mutual fund. the fund manager invests this pool of money, buying and selling shares of stocks and bonds to obtain the maximum possible returns
b. a mutual fund is a savings plan that allows you to set aside money for retirement, usually up to $5000 per year. you do not pay taxes on the money you deposit into a mutual fund, although the withdrawals are taxed
c. a mutual fund is a sequence of equal payments made at equal time periods. the value of a mutual fund is the sum of all deposits plus all interest paid
d. a mutual fund is a type of bank account that combines the features of a checking and a savings account. it requires a minimum balance, pays interest, and offers limited check - writing privileges

Explanation:

A mutual fund pools money from multiple investors. A professional manager invests this pooled money in stocks, bonds, etc. Option B describes a retirement - savings plan (like an IRA in some cases), not a mutual fund. Option C describes an annuity. Option D describes a money - market account.

Answer:

A. A mutual fund is a group of stocks and/or bonds managed by a professional investor. Your money is combined with the money of other investors in the mutual fund. The fund manager invests this pool of money, buying and selling shares of stocks and bonds to obtain the maximum possible returns.