Cordon’s Misunderstanding
After analyzing the advice he was given by a family member, Cordon could see that his cousin was mistaken about mutual funds. He was led to believe they were very risky and costly and were not worth bothering with. Following a research trip to his local library, he acknowledged that some of the information given him was true, such as some funds do have high costs and not all mutual funds are truly safe. Cordon now believes mutual funds are for him. He thinks that direct stocks bond, and real estate investment are beyond his ability and available time.
1. Base on Cordon’s personal limitations mentioned, which advantages of mutual funds would offset them?
a) diversification
b) professional management
c) avoidance of bad brokers
d) A and C
e) A, B, and C
2. Judy Dukes has found a problem with her defined-benefit plan that runs afoul of the law; it is ____.
a) funded
b) unfunded
c) non-portable
d) contributory
e) noncontributory