The Value of an Investment in an Index Fund Depends

question 218

Multiple Choice

The value of an investment in an index fund depends on

• A)the earnings estimate for the major index constituent.
• B)the average performance of all mutual funds.
• C)what happens to the prices of all stocks in that index.
• D)the specific stock selection practices employed by the fund manager.

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Definitions:

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund various public expenditures.

Imports

Goods and services brought into a country from abroad for sale.

Tariff

A tax imposed on imported goods, typically aimed at protecting domestic industries or raising government revenue.

Voluntary Export Restraint

An agreement between exporting and importing countries where the exporter agrees to limit the quantity of goods exported to the importing country.