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:

Neutral Stimulus

A stimulus that initially produces no specific response other than focusing attention.

Unconditioned Response

An automatic, natural response to a stimulus that occurs without prior learning or conditioning.

Conditioned Stimulus

A previously neutral stimulus that, after being paired with an unconditioned stimulus, elicits a conditioned response.

Unlearned Reaction

A natural, instinctive response to a stimulus that occurs without the need for prior learning or experience.