Even Though Indexing Is Growing in Popularity, Only About ________

question 33

Multiple Choice

Even though indexing is growing in popularity, only about ________ of equity in the mutual fund industry is held in indexed funds. This may be a sign that investors and managers ________.

• A) 5%; are excessively conservative
• B) 25%; overestimate their ability
• C) 15%; suffer from framing biases
• D) 25%; engage in mental accounting

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Definitions:

Expected Value

The long-run average value of repetitions of an experiment it represents.

Metric System

A decimal system of weights and measures based on the meter, liter, and gram as units of length, capacity, and weight or mass, respectively.

Centimeter

A unit of length in the metric system, equal to one hundredth of a meter, commonly used for measuring small distances.

Millimeter

A metric unit of length equal to one thousandth of a meter.