Question

A mutual fund is:

a) an investment fund that pools money from many investors and invests that money in the stocks of many firms.

b) generally a share of company stock owned by multiple people.

c) a company that specializes in lending new businesses money.

d) the source of funds that banks use to make home and automobile loans.

Answer 1

Mutual fund is nothing but a pool of money invested in various different stocks with the money is collected from various investors on the whole. the design of the fund and the allocation depends on the manager popularly known as fund manager for a mutual fund

Therefore (a) is the answer to this question

A share of company stock is usually called share and not mutual fund and the company that specialises in lending new business can be a financial institution but not a mutual fund and mutual fund is not for automobile loans and it is rather an investment

Therefore (b,c,d) are wrong