Before Taking Management and Trading Costs into Account, Arbitrage Activities

question 68

Multiple Choice

Before taking management and trading costs into account, arbitrage activities in the market ensure that the returns of actively managed funds are

• A)significantly higher than those of index funds with similar risk.
• B)significantly lower than those of index funds with similar risk.
• C)about the same as those of index funds with similar risk.
• D)more volatile than those of index funds with similar risk.

---

Definitions:

Executive Summary

A concise and comprehensive overview of a larger document or report, highlighting the main points, conclusions, and recommendations.

Table of Contents

A list, typically found at the beginning of documents, that includes the titles or descriptions of the document's content along with page numbers.

Leaders

Individuals who guide or direct in a course by showing the way, making critical decisions, and influencing others.

Proposal Writers

Professionals who specialize in creating documents that outline the scope, cost, and benefits of a proposed project or plan, typically aimed at persuading or informing stakeholders.