Other than trading fees, there is a downward bias in the return of an indexed portfolio because of
A) taxes.
B) the presence of cash.
C) commissions.
D) the prohibition against odd lots.

Question

Quizplus · Accepted Answer

The presence of cash in an indexed portfolio can create a downward bias in its return because cash typically earns less than the equities in the portfolio, reducing the overall return.

Other Than Trading Fees, There Is a Downward Bias in the Return