A Fund That Is Designed to Match the Performance of a Measure

question 59

Multiple Choice

A fund that is designed to match the performance of a measure such as the S & P 500 or the Russell 2000 is called a(n)

• A) index fund.
• B) targeted fund.
• C) sector fund.
• D) block fund.

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Definitions:

Lease

A contractual agreement whereby the owner (lessor) of an asset allows another party (lessee) to use the asset in exchange for payment over a specified period.

Bonds Payable

Long-term liabilities representing money owed by a company to bondholders, to be paid back at a future date.

Common Stock

A type of equity security that represents ownership in a corporation, giving shareholders voting rights and a share in the company's profits via dividends.

Premium on Bonds Payable

The amount by which the bond's selling price exceeds its face value.