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A Key Reason That Actively Managed Funds Have Lower Returns

Question 26

Multiple Choice

A key reason that actively managed funds have lower returns than index funds with a similar level of risk is that:


A) Index funds require more buying and selling to generate their returns
B) Management and trading costs reduce the returns of actively managed funds
C) Index funds spend more on research and management
D) Diversification is more important to actively managed funds

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