5 Questions
What is the objective of a funds management style?
To replicate the performance of a particular market index
What is the goal of replicating a market index?
To match the market average
Which of the following is a characteristic of a replication strategy?
Replicating a market index
What is the main benefit of a replication strategy?
Lower trading costs
Which of the following is NOT a characteristic of a replication strategy?
Active stock picking
Study Notes
Funds Management Style
- The objective of a funds management style is to achieve a specific investment outcome or return.
Replication Strategy
- The goal of replicating a market index is to track the performance of the index.
- A characteristic of a replication strategy is that it involves holding all the securities in the target index.
- The main benefit of a replication strategy is that it provides broad diversification and can be a cost-effective way to gain exposure to a particular market or asset class.
- NOT a characteristic of a replication strategy is that it involves selecting only a subset of securities in the target index.
This quiz assesses knowledge of investment fund management styles, specifically those that aim to replicate the performance of a particular market index. It covers the objectives, goals, and characteristics of replication strategies.
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