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:

Amicable Relations

Friendly and peaceful relations or interactions between individuals, groups, or nations.

New England Colonists

Early European settlers of the northeastern region of the United States, known for their role in establishing some of the first English colonies.

Acadia

A historical region in North America, mainly encompassing parts of present-day provinces of Nova Scotia, New Brunswick, and Quebec, known for its early French colonial history.

Redemptioners

Immigrants, particularly in the 18th and 19th centuries, who signed contracts to work in America for a period in exchange for their passage being paid.