Actively Managed Funds Find It Difficult to Consistently Earn Higher

question 36

Multiple Choice

Actively managed funds find it difficult to consistently earn higher risk-adjusted returns than a broad stock market index. The difference in return between actively managed funds and passively managed index funds can be explained by which of the following?
I. Lower expense ratios at index funds
II. Higher turnover ratios at index funds
III. Differences in returns in sectors of the market and the overall market return

• A)II only
• B)I and III only
• C)I and II only
• D)II and III only
• E)I,II,and III

---

Definitions:

Budgeting Formulas

Mathematical expressions or calculations used to estimate future financial performance, resources needed, or costs associated with specific goals.

Plane Operating Costs

The expenses associated with operating an aircraft, including fuel, maintenance, crew salaries, and aircraft depreciation.

Measures of Activity

Various metrics used to assess the efficiency, performance, or level of activity within a process or company, such as production volume or sales.

Cost Formulas

Mathematical expressions or equations used to calculate various costs associated with the production of goods or services.