Which of the Following Types of Mutual Funds Best Describes

question 582

Multiple Choice

Which of the following types of mutual funds best describes one in which an "expert" seeks to pick the stock holdings in a way that maximizes the rate of return?

• A) indexed equity mutual fund
• B) managed equity mutual fund
• C) supervised equity mutual fund
• D) marked equity mutual fund

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Definitions:

Simple Interest

Simple interest is a calculation of interest on the principal amount of a loan or deposit, based on a fixed interest rate and period, without compounding.

Compounded Continuously

Compounded continuously refers to the mathematical limit where the number of compounding periods per year reaches infinity, leading to the exponential growth of an investment or loan.

Compounded Quarterly

The process of calculating interest on both the initial principal and the accumulated interest from previous periods four times a year.

Annual Percentage Rate

A measure that represents the actual yearly cost of funds over the term of a loan, including any fees or additional costs associated with the transaction.