Managed funds
A)typically have a higher rate of return and higher costs than index funds.
B)typically have a higher rate of return and lower costs than index funds.
C)typically have a lower rate of return and higher costs than index funds.
D)typically have a lower rate of return and lower costs than index funds.

Question

Quizplus · Accepted Answer

Managed funds typically have higher costs due to the active management and research involved in selecting individual securities. However, this does not always translate to a higher rate of return, as the fund manager's decisions may not always lead to outperformance compared to the broader market. In contrast, index funds have lower costs as they track a specific market index, but they may have lower returns as they are tied to the performance of the underlying index. Overall, in terms of a balance between costs and returns, index funds may be a better choice for long-term investments.

Managed Funds