State whether the following statements are true or false with reasons: Buying the units of mutual funds is an indirect investment.
CS Professional · Valuations & Business Modelling · PYQS · December 2021
State whether the following statements are true or false with reasons: Buying the units of mutual funds is an indirect investment.
Answer & Explanation:
True. A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities like stocks, bonds, money market instruments, and other assets. When an individual buys units of a mutual fund, they are indirectly investing in a diversified portfolio of securities managed by experts, rather than directly buying individual stocks or bonds themselves. Hence, it is an indirect investment.
Topics: Investment Management
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