Which of the Following Is Not a Reason Why Index

question 12

Multiple Choice

Which of the following is not a reason why index funds typically incur lower expenses than other mutual funds?

• A) Index funds are not actively managed.
• B) There are no expenses for research.
• C) The portfolio is revised infrequently, so transaction costs are low.
• D) The Securities and Exchange Commission sets a limit on index fund expenses.

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Definitions:

Standard Deviation

A measure of the dispersion or variation in a set of values, indicating how much the values differ from the mean of the set.

Complete Portfolio

A portfolio that includes both risky assets and a risk-free asset, optimizing the balance between risk and return.

Proportions

The relationship between parts of a whole, expressed as fractions, percentages, or ratios.