Which of the following statements is TRUE?
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A. Mutual funds trade directly on stock exchanges while exchange-traded funds are purchased from a financial broker.

B. Mutual funds are actively managed while index funds are passively managed.

C. Index funds track major market indexes while exchange-traded funds do not.

D. Mutual funds invest exclusively in stocks while index funds do not.

Respuesta :

Answer:

B. Mutual funds are actively managed while index funds are passively managed.

Explanation:

Mutual funds are defined as funds that are invested by a person who has limited funds in order to gain a market return on their shares. Mutual funds are actively managed investments. Mutual funds are invested within a short period of time. Examples of mutual funds includes bonds, shares, treasury bills e.t.c

For mutual funds, you don't need to have a large amount of knowledge to do it. Mutual funds are also called or known as open ended funds. They are sold publicly.

Exchange-traded funds are also known as index funds. They are passively managed investment funds that can be invested by a person for a long period of time. They are also referred to as closed ended funds that can be traded on the stock exchange market like normal stocks and shares.

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