Managed Mutual Funds Perform Better on Average Than Index Funds

question 90

True/False

Managed mutual funds perform better on average than index funds because stock prices are usually a good predictor of a company's true value.

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Definitions:

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue; calculated by dividing sales by total assets.

Fixed-Asset Turnover

A financial ratio that measures a company's efficiency in using its fixed assets to generate sales, indicating how well assets are being managed.

EVA

Economic Value Added is a measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.