How Do Index Funds Keep Their Expense Ratios Low

question 43

Multiple Choice

How do index funds keep their expense ratios low?

• A)They trade stocks,often for maximum gains.
• B)They maintain their holdings in the same proportion as well-known indexes.
• C)They have a team of professionals watch for the best options so as to continually tune the fund's performance.
• D)They hold less than 20 companies in the fund.

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Definitions:

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Individuals and entities that are required to pay taxes to government authorities, based on income, property ownership, or consumption.

Export Subsidies

Financial support from the government to companies for the purpose of encouraging exports of goods to foreign countries.

Agricultural Products

Goods derived from farming and agriculture, including food items, feed, fiber, and biofuel commodities.

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