The notable advantage to investing in ________ is diversification.

A) municipal bonds
B) mutual funds
C) blue chip stocks
D) T-bills
E) real estate

BExplanation: B) Mutual funds offer small investors a cost-effective means of purchasing a diversified portfolio. Unless you have a lot of money to invest, it’s hard to buy a large variety of securities. Remember, having a portfolio of various types of securities helps to reduce risk without significantly affecting returns.