CCM Unit Trust Practice Questions - SEC Sri Lanka Certificate In Unit Trust (CCM) Exam

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What is a primary advantage of investing in an open-ended unit trust compared to direct stock market investment for a retail investor in Sri Lanka?

It provides instant diversification across multiple securities, reducing unsystematic risk It guarantees a higher return than the Colombo Stock Exchange's ASPI index every year It grants the investor direct voting rights in the annual general meetings of the underlying companies It exempts the investor from all market-related risks and price fluctuations

Correct Answer:

It provides instant diversification across multiple securities, reducing unsystematic risk

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