Which fund is a bundle of stocks and bonds pooled with other people?

• A. Index Fund
• B. ETF
• C. Target Date Fund
• D. Mutual Fund

Answer: (D)

Pooled investing where money from many people is combined to buy a diversified mix of assets is the hallmark of a mutual fund. A mutual fund collects contributions from numerous investors and uses that pool to buy a portfolio of stocks and bonds, managed by professionals who handle the selections and ongoing oversight. This setup makes diversification accessible with smaller individual investments.

Other options are related but distinct: an index fund is a fund designed to track a specific market index; an ETF is similar to a mutual fund but trades on an exchange like a stock; a target date fund adjusts its asset mix as a chosen retirement date approaches. The description “bundle of stocks and bonds pooled with other people” most directly describes a mutual fund.