For an indexed portfolio, the fund manager will typically
A) attempt to replicate the composition of the particular index exactly.
B) not replicate the composition of the particular index.
C) not alter the weights when the index composition is changed.
D) generate high trading expense ratios.
E) generate high management expense ratios.

Question

Quizplus · Accepted Answer

The whole point of an indexed portfolio is to replicate the composition of a particular index exactly. Therefore, the fund manager will attempt to do so in order to mirror the performance of the index as closely as possible.

For an Indexed Portfolio, the Fund Manager Will Typically