Donel is investing in a mutual fund that really is not as diversified as other funds- It may enjoy good capital gains but is also much riskier when it comes to unsystematic risk- This fund is called a(n) ________ fund.

Why Invest in Mutual Funds?
A mutual fund provides diversification through exposure to a multitude of stocks. The reason that owning shares in a mutual fund is recommended over owning a single stock is that an individual stock carries more risk than a mutual fund.