Which of the Following Is an Advantage of an Indexed

question 72

Multiple Choice

Which of the following is an advantage of an indexed equity mutual fund relative to a managed equity fund?

• A) Indexed funds generally have better stock pickers.
• B) Indexed funds engage in more detailed research.
• C) Indexed funds have lower operating costs because they engage in less stock trading.
• D) Indexed funds earn a significantly higher rate of return than a broad portfolio that represents the entire stock market.

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Definitions:

Double Taxation

The imposition of taxes on the same income, asset, or financial transaction at two different levels, such as corporate income and then again as shareholder dividends.

Corporate Form

A legal structure for organizations that allows them to operate as separate legal entities from their owners, with the ability to hold assets, sue, and be sued.

Accounting

Accounting is the systematic practice, work, or process of communicating and recording financial information for a business or individual.

Finance

The management of large amounts of money, especially by governments or large companies, including the processes of investing, borrowing, lending, budgeting, saving, and forecasting.