Which of the Following Statements Is True

question 329

Multiple Choice

Which of the following statements is true?

• A) Passively managed funds do not pay dividends.
• B) Passively managed funds have only one asset in their portfolio.
• C) Actively managed funds constantly buy or sell assets to generate better returns.
• D) Actively managed funds adjust assets to match the performance of a particular index.

Calculate the future value of investments based on different compounding periods.

Apply the time value of money concept to evaluate payment streams and investment outcomes.

Determine the economic equivalence of different payment schedules under varying interest rates.

Evaluate the effect of inflation on real wages and purchasing power over time.

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Definitions:

Volatility

A statistical measure of the dispersion of returns for a given security or market index, often associated with the magnitude of price fluctuations.

Commodity Exposure

The extent to which a company's future earnings, assets, or liabilities are affected by fluctuations in commodity prices.

Coffee Shop

A retail establishment that sells coffee, tea, and sometimes light meals or snacks.

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity.