Which of the Following Statements Is Generally True When Comparing

question 35

Multiple Choice

Which of the following statements is generally true when comparing mutual funds to exchange traded funds?

• A)Exchange traded funds are more tax efficient than mutual funds.
• B)Mutual funds are more efficient than exchange traded funds.
• C)Exchange traded funds and mutual funds are equally tax efficient.
• D)In order to know which is more tax efficient we must first know what type of investments are held in the respective funds.

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Definitions:

Board of Regents

An administrative body that governs institutions of higher education, overseeing budgetary matters, academic policies, and major appointments.

Elastic Demand

A situation in which the quantity demanded of a good or service is highly responsive to changes in its price.

Price Cut

A reduction in the selling price of goods or services, usually aimed at increasing demand or facing competition.

Elastic Demand

An instance where the demand for a product exhibits substantial sensitivity to adjustments in its pricing.