L421-1

What is the main concept of mutual funds?

• Investing in individual stocks

• Trading cryptocurrencies

• Buying real estate properties

• Pooling money to buy various securities

How are mutual fund shares different from stock shares?

• Mutual fund shares represent investments in many different stocks

• Mutual fund shares are not managed by professionals

• Mutual fund shares provide voting rights

• Mutual fund shares are not diversified

What is the advantage of investing in mutual funds in terms of diversification?

• Diversification reduces returns

• Diversification increases risk

• Diversification enhances portfolio returns while reducing risk

• Diversification has no impact on the portfolio

What is the main disadvantage of mutual funds related to costs?

• High taxes

• No fees associated with mutual funds

• Low management fees

• High costs due to professional management

Which type of mutual fund focuses on investments that pay a set rate of return?

• Equity Funds

• Balanced Funds

• Index Funds

• Fixed Income Funds