An investor who wants to make passive investments would prefer
A) long-term federal corporate bonds
B) exchange traded funds
C) stocks in the Dow Jones industrial average
D) closed-end investment companies

Question

Quizplus · Accepted Answer

An investor who wants to make passive investments would prefer exchange traded funds (ETFs) as they offer a diversified portfolio of stocks or bonds with lower fees and can be bought and sold like stocks on an exchange. Long-term federal corporate bonds and stocks in the Dow Jones industrial average are subject to market fluctuations and require active management. Closed-end investment companies typically have higher fees and are not as easily traded as ETFs.

An Investor Who Wants to Make Passive Investments Would Prefer