Small Growth Funds

B

"CTFA" likely refers to the Chartered Trust and Financial Analyst certification exam, and the question is about small growth funds.

Small growth funds are mutual funds that invest in small companies with strong potential for growth. These companies are typically younger and less established than larger companies, and may operate in emerging industries or niche markets.

The correct answer to the question is B, small company stocks expected to grow fast. Small growth funds seek to invest in small companies that have the potential for above-average growth in earnings and revenues. These companies may have innovative products, a competitive edge, or a unique market opportunity that could fuel their growth in the coming years.

Option A, small company stocks that have grown recently, is incorrect because small growth funds are focused on future growth potential, not past performance. Just because a company has grown recently does not necessarily mean it will continue to grow at the same rate.

Option C, small amount of growing companies, is too vague and does not accurately describe the investment strategy of small growth funds. Small growth funds invest in a diversified portfolio of small companies with high growth potential, not just a small amount of growing companies.

Option D, small amounts of large companies, is incorrect because small growth funds focus on investing in small companies with strong growth potential, not large companies. Investing in large companies would be outside the scope of a small growth fund.