Managed Funds

question 41

Multiple Choice

Managed funds

• A)typically have a higher rate of return and higher costs than index funds.
• B)typically have a higher rate of return and lower costs than index funds.
• C)typically have a lower rate of return and higher costs than index funds.
• D)typically have a lower rate of return and lower costs than index funds.

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Definitions:

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the degree to which a company can increase profits by increasing sales.

Forecasting Errors

Discrepancies between predicted values and the actual outcomes that were not anticipated in statistical forecasts.

Contribution Margin

The difference between the sales revenue of a product and its variable costs.

Net Present Value

The disparity between cash inflows' present value and cash outflows' present value through a certain time frame, utilized to determine an investment's profitability.