Final answer:
The false statement is that open-end mutual funds allow investors to buy and sell their shares through stock exchanges. In reality, these funds are traded directly with the fund company at the net asset value, providing benefits like diversification, redemption at NAV, and cost-effective investment opportunities.
Step-by-step explanation:
The false statement regarding open-end mutual funds is: a) They allow their investors to buy and sell their shares through stock exchanges. Open-end mutual funds do not trade on stock exchanges; instead, they are bought and sold directly through the fund company at their net asset value (NAV), which is calculated at the end of each trading day based on the total value of the fund's underlying assets divided by the number of shares outstanding.
Open-end mutual funds offer various benefits, which include a well-diversified portfolio (answer b), as they invest in a range of securities that can reduce the risk associated with investing. The shares of open-end mutual funds are redeemed at their net asset value (answer c), providing transparency and simplicity in pricing for investors. Lastly, they are known for low-cost diversification (answer d) because they allow for investment in a broad spectrum of assets without incurring significant individual transaction fees.