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Options
- A
Agree and suggest investing only in international funds
-
Validate their concern, highlight market safeguards, and recommend large cap funds
Correct answer
- C
Dismiss their concern as unfounded
- D
Tell them not to invest in mutual funds at all
Why this is the answer
Acknowledging that fraud cases exist (though rare) shows empathy. Then, explaining professional safeguards—thorough due diligence, management meetings, diversification across 30-50 companies—and the market's 180x growth over 25-30 years provides perspective. Recommending large cap funds offers a conservative starting point for building confidence.
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