Which of the following statements would be TRUE?

I. Mutual funds pool the resources of many small investors by selling these investors shares and using the proceeds to buy securities.

II. Mutual funds provide small investors a diversified portfolio that reduces risk.

III. Managerial expertise and denomination intermediation enable mutual funds to consistently outperform a randomly selected group of stocks.

IV. Mutual funds offer investors greater-than-average returns.

I and III

II and IV

II

I and II