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

Mutual funds can be described as which of the following statements?

A loan made by an investor directly to a corporation.

A government-issued bond with a fixed interest rate.

A type of security that represents ownership in a single corporation.

A pool of funds collected from many investors to invest in a diversified portfolio of securities.

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Verified step by step guidance

Understand the concept of mutual funds: Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of securities, such as stocks, bonds, and other assets.

Analyze the options provided in the question: Each option describes a different financial instrument or concept. Mutual funds are distinct from loans, government bonds, or ownership in a single corporation.

Eliminate incorrect options: Mutual funds are not loans made by investors to corporations, nor are they government-issued bonds with fixed interest rates. They also do not represent ownership in a single corporation.

Identify the correct description: Mutual funds are characterized by the pooling of funds from many investors to create a diversified portfolio, which helps reduce risk and provides access to professional management.

Conclude that the correct answer is: 'A pool of funds collected from many investors to invest in a diversified portfolio of securities.' This aligns with the definition and purpose of mutual funds.