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3 July, 05:24

Which of the following statements is TRUE?

A. Mutual funds trade directly on stock exchanges while

exchange-traded funds are purchased from a financial

broker.

B. Mutual funds are actively managed while index funds are

passively managed.

a. Index funds track major market indexes while exchange-

traded funds do not.

D. Mutual funds invest exclusively in stocks while index funds

do not.

+5
Answers (1)
  1. 3 July, 05:36
    0
    B. Mutual funds are actively managed while index funds are

    passively managed.

    Explanation:

    Both mutual funds and Index funds are both portfolio investment Instruments. They comprise of a basket of stocks as opposed to single equity.

    A professional manager manages a mutual fund. The manager uses different analytical tools to select the stocks to be included in the portfolio carefully. Index funds track the prices of the underlying Index. Index funds can be mutual funds or exchange-traded fund ETF such as the S&P 500. Index funds are passively managed.

    Mutual funds will attract a higher commission than index funds to cater for the funds' manager's fee.
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Home » Business » Which of the following statements is TRUE? A. Mutual funds trade directly on stock exchanges while exchange-traded funds are purchased from a financial broker. B. Mutual funds are actively managed while index funds are passively managed. a.
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