Index funds are often preferred to other mutual funds because:

Question

Quizplus · Accepted Answer

Index funds are passively managed and simply replicate the performance of a particular market index, such as the S&P 500, which means they don't require as much management as actively managed funds. This results in lower management fees, making them a more cost-effective option for investors. While A, B, and C may also be true to some extent, they do not necessarily provide a clear advantage of index funds over other mutual funds.

Index Funds Are Often Preferred to Other Mutual Funds Because