Foreign Index Funds Such as WEBS May Be More Useful

question 5

Multiple Choice

Foreign index funds such as WEBS may be more useful as diversification tools than closed-end funds or ADRS because

• A) they have similar expense ratios to open-end country funds.
• B) they are well-diversified and continuously priced.
• C) they sell at a discount to net asset value.
• D) they are actively managed.
• E) all of these.

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Definitions:

Mode

The value that appears most frequently in a data set, a measure of central tendency.

Variance

A measure of the dispersion or spread of a set of data points, calculated as the average of the squared differences from the mean.

Central Tendency

A statistical measure that identifies a single value as representative of the middle of a dataset, commonly the mean, median, or mode.

Outliers

Data points that lie an abnormal distance from other values in a random sample from a population, often indicating a measurement or transcription error, or a novel phenomenon.