What is the main advantage of diversification in a mutual fund?  A. Higher returns  B. Lower investment risk  C. No taxes on gains  D. Access to exclusive investments

Do Mutual Funds help in Diversification of investment?2 pointsa) Not at allb) May Bec) TrueFalse

Why is diversification a recommended investment strategy?*1 pointInvesting in a diversified portfolio guarantees that you won’t lose money with your investments.If you tell your fund manager to use diversification, they’ll charge you lower fees.Diversifying your portfolio helps reduce risk.If you diversify your portfolio, you are guaranteed to make a high return.

WHY DO INVESTORS DIVERSIFY THEIR PORTFOLIOS? A. To limit their exposure to major price swings in any single stock or industry. B. To make consistent profits while enjoying trading. C. To compete against big players like banks and hedge funds. D. To beat the market.HOW DOES DIVERSIFICATION WORK? A. By putting all your money in one basket. B. By limiting your exposure to a single stock or industry. C. By investing in high-risk securities for maximum profit. D. By only investing in the top performing stocks in the market.HOW IS ASSET ALLOCATION DIFFERENT FROM DIVERSIFICATION? Asset allocation is the same as diversification. Asset allocation refers to putting all your money into one type of asset. Asset allocation is about different types of securities, diversification is different sectors Asset allocation means putting all your investments in gold.

What is one benefit of investing in a mutual fund?A.Mutual funds simplify portfolio management.B.Mutual funds are private and open only to accredited investors.C.Mutual funds mature much faster than most bonds.D.Mutual funds provide higher returns than stocks without the risk.SUBMITarrow_backPREVIOUS

Explain what it means to diversify across investments.