Before Taking Management and Trading Costs into Account, Arbitrage Activities

question 83

Multiple Choice

Before taking management and trading costs into account, arbitrage activities in the market ensure that the returns of actively managed funds are:

• A) Significantly higher than those of index funds with similar risk
• B) Significantly lower than those of index funds with similar risk
• C) About the same as those of index funds with similar risk
• D) More volatile than those of index funds with similar risk

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Definitions:

Posttraumatic Stress Disorder

A mental health condition triggered by experiencing or witnessing a terrifying event, characterized by flashbacks, nightmares, and severe anxiety.

Acute Stress Disorder

A disorder in which fear and related symptoms are experienced soon after a traumatic event and last less than a month.

Dissociative Amnesia

A dissociative disorder marked by an inability to recall important personal events and information.

Traumatic Episode

A distressing experience that causes intense emotional and physical reactions, which can lead to long-term psychological effects.