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Which of the following is an example of a unit trust? (A) An investor purchases shares in a public company - HSC - SSCE Business Studies - Question 14 - 2016 - Paper 1
Question 14
Which of the following is an example of a unit trust? (A) An investor purchases shares in a public company. (B) Investors lend money directly to businesses and rec... show full transcript
Worked Solution & Example Answer:Which of the following is an example of a unit trust? (A) An investor purchases shares in a public company - HSC - SSCE Business Studies - Question 14 - 2016 - Paper 1
Step 1
Identify the correct answer options
Answer
To determine the answer, we need to understand what a unit trust is. A unit trust is an investment scheme that allows investors to pool their money together, which is then managed by a trustee and invested according to a stated investment objective. The most suitable option for this characteristic is:
(C) Investors pool their money together and it is invested in the property market.
This option directly describes the nature of a unit trust, where funds are pooled for collective investment.