Someone Who Invests in the Vanguard Index 500 Mutual Fund

question 47

Multiple Choice

Someone who invests in the Vanguard Index 500 mutual fund could most accurately be described as using which approach?

• A) Active management
• B) Arbitrage
• C) Fundamental analysis
• D) Passive investment

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Definitions:

Sober

A state of being free from the influence of alcohol or drugs, characterized by clear thinking and the absence of intoxication.

Agency Agreement

A contract in which one party (the agent) agrees to act on behalf of another party (the principal) in business transactions.

Commission

A fee or percentage of a transaction paid to an agent or broker for facilitating a sale or service.

Lease

A contractual agreement by which one party (the lessor) grants another party (the lessee) the right to use an asset, property, or space for a specified period in return for payment.