A Mutual Fund Pools Money from Many Customers and Invests

question 230

Multiple Choice

A mutual fund pools money from many customers and invests the money in many firms. The fees charged by fund managers are:

• A) lower in bond funds.
• B) higher in passive funds.
• C) lower in passive funds.
• D) higher in bond funds.

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Definitions:

Percentage of Sales

A financial metric or method that relates various income statement accounts as a percentage of sales, often used for analysis or forecasting.

Operating Leverage

A measure of how much a company's income can be affected by changes in sales volume, highlighting the ratio of fixed costs to variable costs.

Operating Leverage

An indicator of the degree to which net operating income responds to a specific percentage variation in sales revenue.

Sales Mix

A composition of different products or services that a company sells, emphasizing the proportion of each product sold relative to total sales.