The Key Idea Behind Constructing an Index Fund Is to Choose

question 21

Multiple Choice

The key idea behind constructing an index fund is to choose a portfolio of securities that

• A) is a mix of growth-oriented and income-oriented stocks.
• B) minimizes risk without sacrificing liquidity.
• C) mimics the performance of a broad market index.
• D) balances short-term and long-term investments.

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Definitions:

Independent Variable

In research, the variable that is manipulated to observe its effect on a dependent variable.

Dependent Variable

The dependent variable is the variable being tested and measured in an experiment or study, whose value is expected to change as a result of manipulations to the independent variable(s).

Independent Variable

is a factor or condition that is intentionally manipulated or varied by researchers to observe its effect on a dependent variable in an experiment.