An index fund
A)holds only stocks and bonds that are indexed to inflation.
B)holds all the stocks in a given stock index.
C)guarantees a return that follows the index of leading economic indicators.
D)typically has a lower return than a managed fund.

Question

Quizplus · Accepted Answer

An index fund holds all the stocks in a given stock index, such as the S&P 500 or the NASDAQ-100. It aims to replicate the performance of the index it tracks, rather than trying to beat it through active management. This makes them a popular choice for investors seeking diversified exposure to a particular market or sector, at a lower cost than actively managed funds.

An Index Fund