Which Statement Is TRUE Regarding Active Investing

question 226

Multiple Choice

Which statement is TRUE regarding active investing?

• A) Active investing typically has higher average returns than passive investing.
• B) Active investing and passive investing typically have equal returns on average.
• C) Active investments typically have higher fees and lower returns on average than passive investments.
• D) Active investing has been shown to be the only type of investing that can consistently "beat the market."

Identify the influence of dividend preferences on investor choices between dividends and capital gains.

Recognize the limitations and flexibility in dividend payment policies.

Acknowledge the role of indentures and covenants in limiting dividend payments.

Understand the reasons why companies might choose stock repurchases over dividends and the tax implications.

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Definitions:

Owners

Individuals or entities that hold the legal right or title to property, possessions, or an entity.

Industry

A particular form or branch of economic or commercial activity.

Corporate Debt Instruments

Financial securities issued by corporations to borrow money, such as bonds and debentures.

Similarities

The characteristics or qualities that make items or scenarios alike.