An index fund
A) is a passively managed mutual fund.
B) has higher trading costs than an actively managed mutual fund.
C) has higher trading costs than a passively managed mutual fund.
D) is an actively managed mutual fund.

Question

Quizplus · Accepted Answer

An index fund is a passively managed mutual fund that seeks to replicate the performance of a particular market index, such as the S&P 500. It typically has lower trading costs than an actively managed mutual fund, as the fund manager does not need to constantly buy and sell securities in an attempt to outperform the market.

An Index Fund