Which of the Following Is TRUE of Mutual Funds

question 120

Multiple Choice

Which of the following is TRUE of mutual funds?
I. Active funds generally give higher returns than passive funds.
II. Most mutual funds generally give higher returns than broad stock indexes.

• A) I only
• B) II only
• C) both I and II
• D) neither I nor II

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Definitions:

Accounting Information

Financial data and records about an organization's transactions, used for reporting, analysis, and decision-making purposes.

Consistency

In accounting, the principle that requires the same accounting methods to be used from period to period for comparability.

Accounting Principles

The rules and guidelines that companies must follow when reporting financial data.

Cash Basis

A financial recording strategy where incomes and costs are documented at the time they are actually exchanged, instead of the moment they are accrued.