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Which of the following is a false statement regarding open-end mutual funds?

a. They offer investors a guaranteed rate of return.

b. They offer investors a well-diversified portfolio.

c. They redeem shares at their net asset value.

d. They offer low-cost diversification.

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Answers (1)
  1. Today, 13:50
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    The correct answer is A.

    Explanation:

    Open-end mutual funds refers to a type of fund that pools money coming from different investors, and uses that money to invest in different business enterprises. The open-ended nature of these funds allow for new contributions and withdrawals from the pool of money, which is usually invested in a well-diversified portfolio at a very low cost to investors. However, open-end funds must keep high cash reserves because investors can withdraw their money at any time. This limits the amount of money open-end funds can invest at any given time, which means a steady rate of return can't be guaranteed.
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Home » Social Studies » Which of the following is a false statement regarding open-end mutual funds? a. They offer investors a guaranteed rate of return. b. They offer investors a well-diversified portfolio. c. They redeem shares at their net asset value. d.
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