___________ is an unmanaged fund designed to replicates closely as possible the performance of a specified index of market activity.
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A. B. C. D.A
The correct answer is A. Index fund.
An index fund is a type of mutual fund or exchange-traded fund (ETF) that is designed to track the performance of a specific market index, such as the S&P 500, the Dow Jones Industrial Average, or the NASDAQ Composite. The goal of an index fund is to provide investors with exposure to a broad market index while keeping costs low and minimizing the need for active management.
Unlike actively managed funds, which rely on a fund manager to select individual stocks and make buy and sell decisions, index funds simply buy and hold the same securities as the index they are designed to track. This means that an index fund's performance will closely mirror the performance of its underlying index, minus any expenses or fees associated with the fund.
Index funds are popular among investors who want to participate in the stock market but don't want to spend a lot of time or money on research and analysis. Because index funds are typically passively managed and have lower operating costs than actively managed funds, they tend to have lower expense ratios and higher tax efficiency than other types of mutual funds.
In summary, an index fund is an unmanaged fund that seeks to replicate the performance of a specific market index, making it a low-cost, low-maintenance way for investors to gain exposure to the stock market.