Index Funds Tend to Have Lower Expenses Than Other Funds

question 12

True/False

Index funds tend to have lower expenses than other funds because they do not incur the costs of professional portfolio management.

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Definitions:

Accounts Payable

Liabilities of a business that represent amounts owed to creditors for goods and services received but not yet paid for.

Net Basis

A method of reporting gains and losses by setting off related items directly against each other, resulting in a net figure.

Financial Liabilities

Obligations owed to another entity, typically involving the future transfer of cash, goods, or services.

Amortised Cost

The amount at which financial assets or liabilities are measured in the balance sheet after the deduction of principal payments and plus or minus the cumulative amortization of any difference between the initial amount recognized and the maturity amount.