Some Index Funds Have Relatively High Expense Ratios of 1

question 98

True/False

Some index funds have relatively high expense ratios of 1.25% even though they are not actively managed.

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Definitions:

Useful Life

The estimated period a fixed asset is expected to be useful for its intended purpose, affecting depreciation calculations.

Double Declining Balance

An accelerated method of depreciation which doubles the rate at which an asset is depreciated compared to the straight-line method.

Straight Line

A method for calculating depreciation or amortization by equally spreading the cost over the useful life of the asset.

Depreciation Expense

The allocated portion of the cost of a tangible asset over its useful life, intended to account for the decrease in value due to use and age.