The Return on an Index Fund May Be Less Than

question 2

Multiple Choice

The return on an index fund may be less than the return on the index it represents because of all of the following except

• A)it may not own all the companies included in the index.
• B)the load charge.
• C)the expense ratio.
• D)excessive commissions on frequent trades by the fund.

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Definitions:

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Organized practices and procedures for recording financial transactions and maintaining financial records for a business.

Pegboard

A board with a grid of holes designed to organize tools, parts, or materials, often used in workshops or craft areas.

Cost-Ratio Analysis

Cost-ratio analysis is a method of comparing the cost of an action to its benefits, often used in business and economics to determine the most economically feasible option.

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An economic evaluation technique that compares the costs and benefits of different projects or decisions to ensure efficient allocation of resources.