An Advantage of Index Funds Over an Active Investment Approach

question 82

Multiple Choice

An advantage of index funds over an active investment approach is:

• A)consistently higher returns
• B)consistently lower risk
• C)lower management expense ratios.
• D)All of these.
• E)None of these.

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Definitions:

Prioritize

To arrange or deal with in order of importance.

Paraphrase

Verbal summary of the key ideas of your partner’s message that helps you check the accuracy of your understanding.

Polarization

The process or phenomenon by which opinions, attitudes, or behaviors become more extreme or divided among members of a group or society.

Static Evaluation

The tendency to view people or situations as unchanging, ignoring the dynamic nature of reality.