Question

Which of the following is not an economic function of mutual funds?

		a)Exploit economies of scale in trading and transaction costs
	b)	Provide the individual investor with the professional expertise necessary to earn abnormal returns through successful analysis of securities
c)		Beat the market on every occasion
d)		Provide the individual investor the opportunity to diversify
e)		Provide an barrier between the individual investor and the abrupt changes of the marketplace

Answer 1

A Mutual fund a defined as well managed fund collected from number of investors. Number of investors collect money at one place and a fund manager invest this fund in various securities to diversify risk and earn higher return. Mutaul Fund Provide the individual investor with the professional expertise necessary to earn abnormal returns through successful analysis of securities and Exploit economies of scale in trading and transaction costs.

Mutual Fund does not Provide an barrier between the individual investor and the abrupt changes of the marketplace.

Option (E) is not an economic function of mutual funds.