Question

Which of the following statements is FALSE?

A. Investors who purchase mutual funds are guaranteed a higher rate of return than a comparable investment in stocks or bonds.
B. Investors purchase mutual funds because of professional management. Even the best portfolio managers sometimes make mistakes.
C. Investors purchase mutual funds for diversification.
D. Professional mutual fund managers pick the securities included in a mutual fund.

Answer 1

Answer:

Option A is the correct option for the following question.

Explanation:

Because investors have no guarantees of higher returns of their mutual funds as compared to the investment in bonds and stocks. The investors always invest in mutual funds because the reason behind this is the professional management and also for the diversification. So, that's why the following option is false.