An Indexed Equity Mutual Fund

question 128

Multiple Choice

An indexed equity mutual fund

• A) is directly tied to either the consumer price index or the GDP deflator.
• B) is a fund that hires a manager who will try to pick the stocks that will increase most in value in the future.
• C) merely holds stocks in the same proportion as they exist in a broad stock market index like the Standard & Poor's 500.
• D) will have high operating costs because these funds engage in a substantial amount of stock trading.

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