which of the following is TRUE about index mutual funds? a. index funds are more actively...

which of the following is TRUE about index mutual funds?

a. index funds are more actively managed than etfs

b. index funds have lower expenses than hedge funds.

c. hedge funds are usually index funds

d. index funds tend to be more risky than actively-managed funds.

e. index funds are less regulated than hedge funds.

Expert Solution

b.index funds have lower expenses than hedge funds

An index fund refers to a mutual fund that is created to track the returns of a specific index for eg:S&P 500.They have low management and trading costs.they are considered tax efficient as they do not perform a lot of trades that would result in taxable capital gains.Hedge funds in comparison have higher expenses and are managed more actively.

other options explained

a)index funds are more actively managed than etfs

False .In comparison to ETfs index funds are more passively managed so this statement is false

c)Hedge funds are usually index funds

Hedge funds are more actively managed and has expenses relative to index funds.So this statement is false.

d)Index funds tend to be more risky than actively managed funds

false They employ low risk strategies than actively managed funds.

e)Index funds are less regulated than hedge funds

False.since Hedge funds have less regulations than index funds.

jeff jeffy answered 1 year ago

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