Beth would like to invest in the stock market, but she has a low income. She would have to purchase shares of stock in just one or two companies, and she fears that is too risky. Which financial intermediary could best help her buy stocks in many companies with her limited assets?
a. a bank
b. a savings and loan
c. a mutual fund
d. an insurance company
c. a mutual fund
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Explain how stock options can ensure compatibility between the interest of stockholders and managers.
What will be an ideal response?
Which is better for making comparisons over time, nominal GDP or real GDP, and why?
What will be an ideal response?
A natural monopoly exists when:
A. unit costs are minimized by having one firm produce an industry's entire output. B. several formerly competing producers merge to become the only firm in an industry. C. short-run average total cost curves are tangent to long-run average total cost curves. D. minimum efficient scale is attained at a small level of output.
Which of the following will cause aggregate private spending to decrease?
A) a reduction in government spending B) an increase in expected future interest rates C) an increase in expected future taxes D) all of the above E) none of the above