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Before Taking Management and Trading Costs into Account, Arbitrage Activities

Question 112

Multiple Choice

Before taking management and trading costs into account, arbitrage activities in the market ensure that the returns of actively managed funds are


A) significantly higher than those of index funds with similar risk.
B) significantly lower than those of index funds with similar risk.
C) about the same as those of index funds with similar risk.
D) more volatile than those of index funds with similar risk.

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