Investment Opportunities in Mutual Funds and Exchange-Traded Funds


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question 1 of 3

Mary wants to invest in a security that is sold in the stock market. If she wants the highest diversification, what should Mary do?

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1. What's the best explanation of diversification?

2. How are a mutual fund and an exchange-traded fund different?

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About This Quiz & Worksheet

Mutual and exchange-traded funds are similar investments with drawbacks and advantages of their own. This quiz/worksheet combo will help you better understand these types of investments. The questions on the quiz will ensure that you understand basic diversification strategies for investing in the stock market.

Quiz & Worksheet Goals

In these business-learning assessments, you'll be tested on:

  • Methods of stock market investment
  • Definition of diversification
  • Differences between a mutual and exchange-traded fund
  • Advantages of mutual and exchange-traded funds
  • Creation unit

Skills Practiced

This quiz and worksheet will allow you to test your skills in the following areas:

  • Reading comprehension - ensure that you draw the most important information on mutual and exchange-traded funds from the related lesson
  • Critical thinking - apply relevant concepts to examine information about investing in a different light
  • Distinguishing differences - compare and contrast topics from the lesson, such as mutual funds and exchange-traded funds
  • Information recall - access the knowledge you've gained regarding the stock market and diversification

Additional Learning

To learn more about diversified investments, review the lesson entitled Investment Opportunities in Mutual Funds and Exchange-Traded Funds. This business lesson covers these objectives:

  • Define mutual and exchange-traded funds
  • Differentiate between these two types of funds
  • Identify the advantages and disadvantages of these investment strategies
  • Define terms such as diversification and liquidity