alleryStart learning →What is the basic way a mutual fund operates?
AIt pools money from many investors to buy securities
BIt lends a single investor's money to one company
CIt insures bank deposits against default losses
DIt issues government bonds directly to the public
Answer & Solution
Correct answer: A. It pools money from many investors to buy securities
A fund collects small contributions from many investors into one pool and uses it to buy a portfolio of securities.
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