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Questions and Answers
Which of the following is NOT a way in which mutual funds and ETFs make money?
Which of the following is NOT a way in which mutual funds and ETFs make money?
- Dividend payments
- Reinvesting to buy more shares (correct)
- Capital gain distributions
- Increased NAV/market price
What is an index used for?
What is an index used for?
- To calculate capital gain distributions
- To determine the value of a security
- To compare different securities markets
- To measure performance of mutual funds and ETFs (correct)
What are two characteristics of mutual funds mentioned in the text?
What are two characteristics of mutual funds mentioned in the text?
- They are only suitable for experienced investors
- They are similar to ETFs
- They offer diversification and are professionally managed (correct)
- They have low fees and expenses
