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:

Apple Computer

A technology company that designs, manufactures, and markets consumer electronics, software, and services, well-known for products like the iPhone and MacBook.

Stock Holdings

The portfolio of stocks or shares owned by an individual, institution, or entity, representing investment or ownership interest.

Reduction In Risk

A decrease in the uncertainty associated with the return on an investment or the outcome of an action, often pursued through diversification or insurance.

Wal-Mart

A multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores.