Which of the Following Statements Is Incorrect

question 26

Multiple Choice

Which of the following statements is incorrect?

• A) A mutual fund is usually run by an investment company.
• B) Mutual funds with lower expense ratios tend to outperform other funds with a similar investment objective.
• C) For each mutual fund, all expenses charged and reflected in the expense ratio are always valid.
• D) The SEC requires that a majority of the directors of a mutual fund board be independent.

---

Definitions:

Esther Duflo

A French-American economist known for her research in development economics and as a recipient of the Nobel Prize in Economics.

Abhijit Banerjee

An economist who won the Nobel Prize in Economic Sciences in 2019 for his experimental approach to alleviating global poverty.

Poor Societies

Communities or nations with low levels of income, resources, and standards of living.

Opportunity Cost

The expense incurred by not selecting the second-best choice when deciding between different options.