What is a mutual fund?

A mutual fund is best defined as an investment vehicle that pools money from many investors to purchase a diversified portfolio of securities, such as stocks, bonds, or other assets. This pooled approach allows individual investors to access a broader range of investments than they might be able to on their own, as well as to benefit from professional management of the fund's assets.

Mutual funds offer several advantages, including diversification, which helps to spread risk, and convenience, as they are managed by financial professionals who analyze and select the appropriate investments. Additionally, when you invest in a mutual fund, you buy shares of the fund itself, which represents a fraction of the total assets in the fund.

In contrast to the other options, which highlight different investment concepts or products, option B accurately captures the essence of mutual funds and their functionality in the investment landscape.