Multiple choice

The most important reason for an investor to prefer a bank deposit to a mutual fund is

  1. the creditworthiness of the bank

  2. because the bank does not invest in securities

  3. that the bank offers a guarantee

  4. All of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The primary reason investors prefer bank deposits is the perceived creditworthiness and trust in the banking institution, backed by deposit insurance in many countries. Option B is incorrect - banks do invest in securities. Option C is incorrect - bank deposits are not guaranteed (except for insured amounts).

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