Funds Intermediate: Conservative Mutual Funds

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1.
A main objective of conservative mutual funds is to generate current income.
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True. The income objective is one of the defining characteristics of conservative funds.
2.
A balanced mutual fund is highly diverse.
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True. To be balanced, such a fund must choose a wide variety of investments.
3.
A mutual fund is conservative as long as its goal is to conserve principal.
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True. That is the defining characteristic of conservative funds.
4.
Conservative mutual funds invest in securities with _______.
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Low volatility. Low volatility is part of what makes a conservative fund conservative.
5.
Conservative mutual funds are best suited for investors with high risk tolerance.
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False. Conservative mutual funds are best suited for investors who are risk-averse.