In Comparing Actively Managed Mutual Funds with Those Funds That

question 83

Multiple Choice

In comparing actively managed mutual funds with those funds that simply buy and hold a large market portfolio (index funds) ,we would expect that

• A) the actively managed funds provide a higher return than the index funds.
• B) the index funds provide a higher return after expenses than the actively managed funds.
• C) actively managed funds and index funds provide the same returns.
• D) index funds provide a lower return than actively managed funds only if taxes are taken into consideration.

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Definitions:

Growth Stage

A phase of development in which an organization or econom y experiences a significant increase in activity or size.

OM Strategies

Refers to the approaches and methodologies a business uses to streamline its operations management processes, including production, inventory control, and quality assurance to improve efficiency and productivity.

Multinational Corporation

A company that operates in multiple countries, managing production or delivering services in more than one country.

Maquiladora

A factory in Mexico run by a foreign company that exports its products to the country of that company, taking advantage of lower labor costs.