Investment Options Quiz

What is the main difference between mutual funds, index funds, and ETFs?

• Mutual funds are managed by fund managers, index funds follow specific categories of stocks, and ETFs are traded on the exchange.

• Mutual funds are traded on the exchange, index funds are managed by fund managers, and ETFs follow specific categories of stocks.

• Mutual funds follow specific categories of stocks, index funds are managed by fund managers, and ETFs are guaranteed to make the average of all the companies in the market.

• Mutual funds guarantee the average performance of all the companies in the market, index funds are traded on the exchange, and ETFs are managed by fund managers.

What was the main drawback of mutual funds that led to the popularity of index funds?

• High fees charged by fund managers.

• Inability to diversify investments.

• Lack of flexibility in trading.

• Limited options for investment categories.

What is the key advantage of index funds over mutual funds?

• Guaranteed high returns and expert fund management.

• Access to a wider range of investment categories and lower fees.

• Higher flexibility in trading and lower risk.

• Lower fees and guaranteed average performance of specific categories of stocks.

How do ETFs differ from mutual funds and index funds in terms of trading?

• ETFs can be traded throughout the day, while mutual funds and index funds can only be traded once a day.

• Mutual funds can be traded throughout the day, while ETFs and index funds can only be traded once a day.

• Mutual funds and ETFs can be traded throughout the day, while index funds can only be traded once a day.

• Index funds can be traded throughout the day, while mutual funds and ETFs can only be traded once a day.

What is the main advantage of ETFs over mutual funds and index funds?

• Higher flexibility in trading and lower risk.

• Expert fund management and access to a wider range of investment categories.

• Lower fees and guaranteed high returns.

• Ability to trade throughout the day and more control over investments.

Which company offers free trading of ETFs without charging any fees?

• Betterment

• Vanguard

• Fidelity

• Wise man

What is the main reason for the popularity of ETFs among investors?

• Higher control over investments and ability to trade throughout the day.

• Access to a wider range of investment categories and lower risk.

• Expert fund management and guaranteed high returns.

• Flexibility in trading and lower fees.

What is the key feature of index funds that distinguishes them from mutual funds?

• Expert fund management and access to a wider range of investment categories.

• Ability to trade throughout the day and more control over investments.

• Lower fees and flexibility in trading.

• Following specific categories of stocks and guaranteed average performance.

What is the main disadvantage of ETFs compared to mutual funds and index funds?

• ETFs have higher fees and less control over investments.

• ETFs cannot be traded throughout the day.

• ETFs do not guarantee the average performance of specific categories of stocks.

• ETFs do not offer a wide range of investment categories.

What is the main reason for the rise in popularity of index funds over traditional mutual funds?

• Index funds offer higher flexibility in trading and lower risk.

• Index funds are managed by expert fund managers.

• Index funds have lower fees and follow specific categories of stocks.

• Index funds guarantee high returns.