Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

When you invest in a mutual fund, you are contributing to a pool of money that will be:

invested in a diversified portfolio of securities by a professional manager

used exclusively to purchase shares of a single company

loaned directly to other investors

held in cash until you request a withdrawal

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Verified step by step guidance

Understand the concept of a mutual fund: A mutual fund is an investment vehicle that pools money from multiple investors to invest in a diversified portfolio of securities, such as stocks, bonds, and other assets.

Recognize the role of a professional manager: Mutual funds are managed by professional fund managers who make investment decisions on behalf of the investors to achieve the fund's objectives.

Eliminate incorrect options: Review the provided choices and identify which ones do not align with the definition of a mutual fund. For example, mutual funds are not used exclusively to purchase shares of a single company, nor are they loaned directly to other investors or held in cash indefinitely.

Focus on diversification: Mutual funds are designed to reduce risk by investing in a variety of securities, which is a key feature of their structure.

Select the correct answer: Based on the explanation, the correct answer is that mutual funds are 'invested in a diversified portfolio of securities by a professional manager.'