Which of the Following Is an Advantage of an Indexed

question 72

Multiple Choice

Which of the following is an advantage of an indexed equity mutual fund relative to a managed equity fund?

• A) Indexed funds generally have better stock pickers.
• B) Indexed funds engage in more detailed research.
• C) Indexed funds have lower operating costs because they engage in less stock trading.
• D) Indexed funds earn a significantly higher rate of return than a broad portfolio that represents the entire stock market.

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Definitions:

Direct Labor Cost

The total cost of all labor directly involved in the production of a product or service.

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the weighted average of all units available for sale.