An index fund that uses futures to hold the S&P 500 Index and invests the remainder in bonds would be an example of:
A)a value index fund.
B)a derivatives index fund.
C)an enhanced index fund.
D)an active index fund.

Question

Quizplus · Accepted Answer

An enhanced index fund is a type of index fund that uses a combination of passive and active management strategies to achieve better returns than a traditional index fund. In this case, the fund is using futures to hold the S&P 500 index passively, but it is also actively investing the remainder in bonds. Therefore, it is considered an enhanced index fund.

An Index Fund That Uses Futures to Hold the S&P