Why is investing in a mutual fund less risky than investing in a particular company’s stock?
A. Mutual funds only invest in blue-chip stocks.
B. Investments in mutual funds are more liquid.
C. Mutual funds hold a diversified portfolio of stocks.
D. Investments in mutual funds offer a higher rate of return.
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answer-D because in mutual fund it offers lower costs, convenience, and diversification. Investors use convenience of mutual fund so as to get portion of equity to their portfolios than buying individual shares.
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