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Please Answer true or false, also explain why in 2 lines. Exchange Traded Fund. ETFs are offshoots of mutual funds that allow investors to trade
Please Answer true or false, also explain why in 2 lines.
- Exchange Traded Fund. ETFs are offshoots of mutual funds that allow investors to trade index portfolios just as they do shares of stock. ETFs can include fixed income, commodities, sectors, and currency as well as provide the leverage. (i.e 2x or 3x) and shorting.
- Mutual Fund taxes. Income earned on mutual fund portfolios is federally taxed at the level of the fund. Cost of investing are limited to front-end loads and sale charges but not fund operating expenses that, by design, are usually set at 0 (or netted out by the fund manager). If true, briefly explain
- Algorithmic trading. Algorithmic trading is the use of sophisticated computer programs to make trading decisions. Algorithmic trading seeks to exploit very short-term trends as new information about a firm becomes reflected in its stock price. Finally, algorithmic trading firms trading is widely viewed as unethical by professional investors. If true, explain.
- Performance. Over the last 40+ years, the majority of active equity mutual funds have outperformed the market (Including passive index funds) over the longer period of time and persistence defined as the consistency of performance, is readily evident. The market is generally measured by broad-based indices. Such as the S&P 500, russel 1000, or wilshere 5000. If true, explain.
- Real interest rates: the economys equilibrium level of real interest rates depends on the willingness of households to save, as reflected in the supply curve of fund, and on the expected profitability of business investment in plants, property, equipment and inventories, as reflected in the demand curve for funds. Households generally do not factor into the demand equation. Real interest rates depend on government fiscal and monetary policy, and latter orchestrated by the US Department of Treasury. If true, Explain (very briefly)
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