Q1. [1] § What are the benefits of investing in Mutual Funds? § What is Active Fund Management? § What is Passive Fund Management?
Investment decisions in a mutual fund are made by fund managers who have the expertise, information and knowledge to make better decisions than what a typical individual investor may be able to make. Identify the advantage of investing in mutual fund in this statement.
- (A) Diversification
- (B) Liquidity
- (C) Flexibility
- (D) Professional Management
Previously asked in CBSE board exam
2025 92 Q2 (vi)
Generated by claude-sonnet-4-6 · 2026-06-15 07:07 · grounding rag
Model Answer
(D) Professional Management
The statement describes fund managers using their expertise, information, and knowledge to make investment decisions — this is the advantage of Professional Management.
Explanation
The passage under "Professional Fund Management" directly states that professionals with expertise and resources manage the fund and analyse markets to pick good investments. The other options — Diversification, Liquidity, and Flexibility — relate to different benefits not described in the statement.
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