Which of the Following Is a Feature of Index Funds

question 31

Multiple Choice

Which of the following is a feature of index funds?

• A) They have lower fees.
• B) They select and hold stocks to match the performance of a stock index.
• C) They do not require managers to select stocks and decide when to buy and sell.
• D) All of the above.

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Definitions:

Corrective Tax

Levies imposed to address and ameliorate the negative externalities generated by certain economic activities, thereby realigning social and private costs.

Subsidy

A financial contribution granted by the government or a public body to support businesses, reduce the price of commodities, or encourage activities beneficial to the public interest.

Equilibrium Number

When market demand equals supply, leading to stability in prices.

Pollution Permits

Licenses that allow the holder to emit a specific amount of pollutants into the environment, used in regulatory strategies to reduce pollution.