Canadian Securities Course (CSC) Practice Exam · Question
What is the primary advantage of a mutual fund for a small investor?
Mutual funds offer investors diversification by pooling money from many investors to buy a portfolio of securities, managed by professional fund managers.
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Question: What is the primary advantage of a mutual fund for a small investor?
Answer options:
- Guaranteed returns
- High degree of control over individual stock selection ✅ Diversification and professional management
- Tax-free income
Correct answer: Diversification and professional management
Explanation: Mutual funds offer investors diversification by pooling money from many investors to buy a portfolio of securities, managed by professional fund managers.
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