A Purely Passive Strategy

question 21

Multiple Choice

A purely passive strategy

• A) uses only index funds.
• B) uses weights that change in response to market conditions.
• C) uses only risk-free assets.
• D) is best if there is "noise" in realized returns.
• E) is useless if abnormal returns are available.

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Definitions:

Sixth Amendment

An amendment to the U.S. Constitution that guarantees rights to a fair and speedy trial, the right to a lawyer, and the right to an impartial jury.

Speedy Trial

A legal right guaranteeing individuals accused of crimes to be tried promptly, aimed at preventing undue and lengthy pretrial incarceration.

Impartial Jury

A jury that is unbiased and fair, selected to review evidence in a legal case and make a decision without prejudice.

Double Jeopardy Clause

A provision within the Fifth Amendment of the U.S. Constitution that protects individuals from being tried twice for the same crime.