A Significant Advantage of Index Funds Is Their

question 56

Multiple Choice

A significant advantage of index funds is their:

• A)lower market price than other types of funds.
• B)sector rotation.
• C)tax efficiency.
• D)minimization of risk.

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Definitions:

Consumer Surplus

The gap between the total price consumers are willing and able to shell out for a good or service and the amount they really pay.

Water-Diamond Paradox

An economic paradox that questions why diamonds are pricier than water despite water being essential for survival and diamonds having relatively little practical use.

Marginal Utility

The extra pleasure or benefit a consumer receives from using an additional unit of a product or service.

Demand Schedule

A table that lists the quantity of a good that consumers are willing and able to purchase at varying price points, at a specific moment in time.