Which of the following are true about a passive investment style? Select all that apply.Review LaterTypically doesn’t have a risky investing mandateAttempts to replicate a benchmark or indexUsually lower fees relative to an active investment styleUsually higher fees relative to an active investment styl

Which of the following are true about an active investment style? Select all that apply.Review LaterTrying to earn more than a benchmark or indexReplicate a benchmark or indexMore risk and returnTypically lower fees compared to a passive investment style

What is the difference between active and passive investing and why is a specificbenchmark required when comparing the two investment strategies? Use the table below tocreate An active investment (portfolio) that invests in all the 5 stocks (at least 5%) but shouldoutperform the market (if the analyst’s predictions are correct). The portfolio is currentlyinvested passively, and each stock is invested in equal amounts.Stock Current market Price Current Valuation Weighting in a passive portfolioAXW $12.52 $10.25 20%NAQ $2.55 $2.75 20%PLB $42.96 $44.61 20%UGD $1.75 $0.98 20%MER $108.65 $106.54 20%Question 3: We know that in an efficient market, investors are unable to generate returnsconsistently above the market, and hence passive investing is suitable. Explain, if marketswould remain efficient if ALL investors invested passively. Now explain if markets wouldremain efficient if there was one active investor?Question 4: Explain the reasons why the textbook uses the example of pension funds to provethat markets are efficient? Further explain, what were the reasons that pension fundsunderperform their benchmark. Is the evidence of mutual fund performance for retailinvestors any better than the evidence for pension funds? Why is this the case?Question 5: Berk (2005) provides a theoretical framework that explains how fund managers’returns eventually equal benchmark returns. Explain how investors choose fund managers toinvest with and why their returns eventually fall to the returns of the benchmark. Furtherexplain if this theory explains if markets are efficient or inefficient?

Active and passive investing are exclusive, as are traditional and non-traditional managers. Traditional funds never use active strategies or enter the realm of non-traditional investing strategies.Review LaterTrueFalse

-------------are also Index Funds but follow different strategy while investing in Index whose performance it seeks to track.  2 pointsa) Passive fundsb) Active fundsc) Balanced fundsd) Smart Beta Funds

Active and passive investing are exclusive, as are traditional and non-traditional managers. Traditional funds never use active strategies or enter the realm of non-traditional investing strategies.