Which Statement Is Not True About Index Funds as Compared

question 18

Multiple Choice

Which statement is not true about index funds as compared to actively managed funds?

• A)They have lower expense ratios.
• B)They tend to be less profitable than actively managed funds.
• C)They usually have lower turnover in buying and selling assets than actively-managed funds.
• D)They tend to have lower capital gains tax than actively managed assets because the assets are usually held longer before being sold.

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Definitions:

Sales Dollar

A measure of the revenue generated from the sale of goods or services, expressed in dollar amounts.

Revenue Accounts

Accounts that record the income a company generates from its business activities.

Credit Balances

Balances within accounts that indicate the amount owed to a creditor; commonly found in liability and equity accounts.

Stockholders' Equity

Shareholders' equity in a corporation, defined by the excess of asset value over the amount of liabilities.