If all of the following mutual funds are designed to passively mimic the S&P 500 stock...
If all of the following mutual funds are designed to passively mimic the S&P 500 stock index, then which mutual fund would be the best choice?
a. Mutual Fund D with an expense ratio of 0.12%.
b. Mutual Fund C with an expense ratio of 0.07%.
c. Mutual Fund B with an expense ratio of 0.59%.
d. Mutual Fund A with an expense ratio of 0.28%.
Homework Answers
If a mutual fund is designed to mimic the S&P 500 then the expense ratio should be the ratio that is lowest possible as the MF manager has to do nothing then adjust the fund to stock index, thus the answer is:-
b. Mutual Fund C with an expense ratio of 0.07%.
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