Final answer:
A balanced mutual fund does not have a fixed stock to bond ratio, so the statement is false. The allocation between stocks and bonds in a mutual fund is determined by the fund manager based on their strategy and goals.
Step-by-step explanation:
A balanced mutual fund typically does not have a fixed stock to bond ratio, so the statement that it typically has a 60%/40% ratio is false. The allocation between stocks and bonds in a mutual fund is determined by the fund manager based on their investment strategy and the objectives of the fund. Some balanced mutual funds may have a 60%/40% ratio, but others may have different allocations depending on market conditions and the fund's goals.
For example, a balanced mutual fund may choose to have a higher allocation to stocks when the stock market is performing well, and a higher allocation to bonds when the market is more volatile. The goal is to achieve a balance between growth and income while managing risk.
It's important to note that the allocation of a mutual fund can change over time as market conditions change, so it's always a good idea to review the fund's prospectus or consult with a financial advisor to understand the current allocation.