You Are Considering Investing in a No-Load Mutual Fund That

question 59

Multiple Choice

You are considering investing in a no-load mutual fund that focuses on growth stocks or in an index fund. The growth stock fund had a gross annual return of 15% and expenses of 2%. The index fund had a gross annual return of 12% and expenses of 1%. Assuming equal risk, you should buy

• A) the index fund.
• B) the growth fund.
• C) some of both.
• D) neither; the expenses are too high.

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Definitions:

Monitored

Being watched, checked, or tracked, especially for progress or compliance.

Viability

The capability of being successful or effective; the ability to exist, grow, or develop.

Oriented Manager

A manager who is focused or directed towards specific goals, outcomes, or orientations such as customer, sales, or product.

Anticipates Problems

The ability to foresee potential issues or obstacles and plan strategies to avoid or mitigate them effectively.