QUESTION 4 What is the primary source of conflict of interest between shareholders and investment managers? Investment managers have a policy to engage in market timing, Investment managers have an incentive to increase total assets even when this is done at the expense of shareholders' returns. Investment managers always pursue late trading. Investment managers generally invest in index funds. QUESTION 5 than accept the gamble of a loss. Because most people are risk averse, they would rather paya profit certainty equivalent front-load back-load