Which of the Following Is Not True of Index Funds

question 142

Multiple Choice

Which of the following is not true of index funds?

• A)Sometimes they are called "passive" funds.
• B)They do have managers that simply buy the securities in the index.
• C)They are a low-cost alternative to managed mutual funds.
• D)The S&P 500 index outperforms the majority of funds over many years.
• E)The typical expense ratio for index funds is 0.50 percent or more.

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Definitions:

Direct Materials

The raw materials that can be directly traced to the manufacturing of a product.

Remachine

The process of reworking or refurbishing a piece of machinery to restore its functionality or improve its performance.

Manufacturing Cost

The total expense incurred in the process of producing goods, including direct materials, direct labor, and manufacturing overhead.

Scrap

Material that is discarded or left over from the manufacturing process, often repurposed or recycled, but sometimes considered waste.