From Information Presented in Chapter 8, You Should Be Able

question 9

Essay

From information presented in Chapter 8, you should be able to identify at least two reasons an investor may want to consider an index fund over a managed (mutual) fund.What are these reasons?

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Definitions:

Net Asset Value

The value per share of a mutual fund or an exchange-traded fund, calculated by dividing the total value of all the fund's assets minus liabilities by the number of shares outstanding.

Year-End Assets

The total value of all assets owned by an entity at the end of the fiscal year.

Liabilities

Financial obligations or debts owed by a person or company to others.

Mixed Asset Classes

Investment portfolios that include a combination of stocks, bonds, and other securities to achieve diversification.