Canadian Securities Course (CSC) Level 1 Practice Exam

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What is the purpose of an investment fund?

Provides mortgage financing to homebuyers
Offers insurance coverage to investors
Sells shares or units to the public and invests in securities
Acts as a savings account for short-term goals

The correct answer is: Sells shares or units to the public and invests in securities

An investment fund's primary purpose is to sell shares or units to the public and invest in securities on behalf of the fund's investors. By pooling money from multiple investors, the fund can achieve diversification and professional management of the investments, which may not be easily achievable for individual investors. This allows investors to access a diversified portfolio of securities that align with their investment objectives without having to manage them directly. Therefore, option C is the correct answer as it accurately describes the primary function of an investment fund.