An active fund manager realises he or she cannot beat the market and therefore adopts a strategy of seeking to track the market index.

Name: An active fund manager realises he or she cannot beat the market and therefore adopts a strategy of seeking to track the market index.
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Question

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An active fund manager aims to outperform the market, while a passive fund manager seeks to track the market index. If an active manager decides to track the index, they are essentially adopting a passive strategy.

An Active Fund Manager Realises He or She Cannot Beat