SIE Exam Question 581: Answer and Explanation

Question: 581

____ Diversification smooths price volatility, historical above-inflation return, can preserve purchasing power in a portfolio.

• A. Money market fund
• B. Corporate bond
• C. Common stock
• D. Mutual fund

Correct Answer: D

Explanation:

Mutual fund: Diversification smooths price volatility, historical above-inflation return, can preserve purchasing power in a portfolio.