Which investment pools money from many investors to own a diversified portfolio of stocks and bonds?

• A. ETF
• B. Bond
• C. Mutual Fund
• D. Stock

Answer: (C)

Pooling funds from many investors to own a diversified portfolio of stocks and bonds is what a mutual fund does. Investors put money into the fund and receive shares, while a professional manager uses that money to buy a mix of securities—spreading risk across different assets. This built-in diversification, plus professional oversight and typically accessible minimums, is why this option fits best. An ETF also pools money and holds a diversified basket, but it trades on an exchange like a stock. A single bond or a single stock isn’t a pool, so they don’t provide the diversified portfolio described.