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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following types of mutual funds would most appropriately be classified as long-term investments that are properly diversified?

A balanced mutual fund investing in a mix of stocks and bonds across various industries

A mutual fund that invests exclusively in a single company's stock

A sector-specific mutual fund focused solely on technology stocks

A money market mutual fund investing in short-term debt instruments

Previous problemNext problem

Verified step by step guidance

Understand the concept of mutual funds: Mutual funds pool money from multiple investors to invest in a diversified portfolio of assets such as stocks, bonds, or other securities. They are managed by professional fund managers.

Identify the characteristics of long-term investments: Long-term investments typically aim for growth over an extended period and often involve a diversified portfolio to reduce risk.

Evaluate the options provided: Analyze each type of mutual fund mentioned in the problem to determine its suitability as a long-term, diversified investment.

Option analysis: A mutual fund investing exclusively in a single company's stock lacks diversification and is highly risky. A sector-specific mutual fund focused solely on technology stocks is also not properly diversified, as it is concentrated in one industry. A money market mutual fund investing in short-term debt instruments is not a long-term investment, as it focuses on liquidity and safety rather than growth.

Conclude that a balanced mutual fund investing in a mix of stocks and bonds across various industries is the most appropriate choice for a long-term, diversified investment. This type of fund spreads risk across different asset classes and industries, aligning with the principles of diversification and long-term growth.