Which Is an Example of Passive Investing

question 29

Multiple Choice

Which is an example of passive investing?

• A) investing in one specific stock
• B) investing in a mutual fund that tries to mimic the S&P 500
• C) investing in a mutual fund that is actively managed by a fund manager
• D) researching many different stocks and accumulating your own portfolio of investments

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Definitions:

Random Variable

A variable whose outcomes depend on the results of a random phenomenon, and which can take on different values with certain probabilities.

Poisson Distribution

A distribution of probability that denotes the likelihood of a specific number of occurrences happening within a set period of time or space.

Discrete Distribution

A statistical distribution that shows the probabilities of outcomes with finite values or countable outcomes.

Interval of Time

A specific duration or length of time between two points or events.