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puteri [66]
3 years ago
12

A managed mutual fund:

Business
1 answer:
Ilia_Sergeevich [38]3 years ago
7 0

Answer:

b) Has a higher expense ratio than an index fund

Explanation:

A mutual fund is a diversified investment tool. The fund is a collection of different types of stocks that form a single investment asset. It is a basket of stock trading as a single asset. Purchasing one unit of a mutual fund is equivalent to purchasing several portions of each stock that make up the mutual fund.

A professional manager manages the mutual fund. He or she carefully selects the stocks that go into the basket forming the mutual fund. The manager charges a professional fee, which is usually a percentage of the investment. Due to this fee, a mutual fund is relatively expensive as compared to an index fund that does not require the input of a manager.

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