The Performance of Index Funds

question 61

Multiple Choice

The performance of index funds

• A)usually falls short of the performance of actively-managed funds.
• B)provides evidence in support of the notion that stock prices do not depend upon supply and demand.
• C)provides evidence in support of the efficient markets hypothesis.
• D)provides evidence in support of the notion that stock-market participants are irrational.

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Definitions:

Factor 2

A component or element that contributes to a particular result or situation.

Profit

The financial gain obtained when the amount earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Marginal Product

Marginal product is the additional output resulting from the use of one more unit of a variable input, holding other inputs constant.

Fertilizer

Substances used to supply essential nutrients to plants, aiming to enhance growth, yields, and quality of agricultural produce.