Question

Which one of the following arguments is correct?

Multiple Choice

A) Mutual funds provide small investors with low-cost diversification.

B) Investment banks raise money from depositors and make loans to individuals and businesses.

C)An individual can save and invest in a corporation only by purchasing additional shares.

D)NEW YORK STOCK EXCHANGE (NYSE) is not considered as financial markets.

Answer 1

Financial market is a market where people trade securities. Stock exchange is a finance market.

Hence, Option D is not the answer.

Investment banks help companies in raising money and the commercial banks raises the Money from depositors to lend it further.

Hence, Option B is not the answer.

An Investment can be made in corporation by investing in preference shares, equity shares, and bonds and not just by purchasing shares.

Hence, Option C is not the answer.

Mutual funds are a pool of securities which provides small investor an exposure to wide variety of stocks and helps in diversification at a lower cost.

Hence, Option A is the answer.