Exchange-Traded Funds

question 45

Multiple Choice

Exchange-traded funds

• A)consistently outperform other funds
• B)mimic an index of securities
• C)require investors to select individual stocks
• D)are illustrations of load funds

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Definitions:

Imitation Problem

The challenge businesses face when competitors copy their products or services, potentially reducing the original company's profits and market share.

Allocative Efficiency

A state of the economy in which production represents consumer preferences; in other words, every good or service is produced up to the point where the last unit provides a utility equal to its cost of production.

Technological Advance

The progress or development in technology, leading to new products, processes, or systems.

Preferred Mix

The optimal combination or assortment of goods, services, investments, or resources desired by an individual, firm, or economy.