Question

Suppose you believe that energy companies will be making huge profits in the future, and you'd like to share in those profits. You're not sure which companies will be the most successful, or successful at all for that matter, so you decide you want to invest a little in a lot of companies to spread the risk. The best way for you to do that is by investing in:

- money market funds.
- an energy mutual fund.
- preferred stocks.
- treasury bonds.
- certificates of deposit.

Answer 1

An energy mutual fund

Step-by-step explanation:

An energy mutual fund is like a normal fund, with the difference that it invests your portfolio only on energy-sector companies, for example: oil companies, natural gas companies or coal companies (although these tend to be neither as profitable nor as common).

If you go to an energy mutual fund, you will be offered investment options such as common stock, preferred stock and corporate bonds, and you money will be spread in among those investment instruments. Your portfolio will be diversified in a sector that usually has good economic prospects.