An advantage of index funds over an active investment approach is:
A)consistently higher returns
B)consistently lower risk
C)lower management expense ratios.
D)All of these.
E)None of these.

Question

Quizplus · Accepted Answer

One advantage of index funds is that they typically have lower management expense ratios compared to actively managed funds. This is because index funds simply track a specific index rather than having a team of managers actively making investment decisions, which can result in lower fees for investors. Consistently higher returns and lower risk cannot be guaranteed with index funds, so options A and B are incorrect. The answer is not D or E.

An Advantage of Index Funds Over an Active Investment Approach