Question

9. The major downside of managed investments is the fees that investors must pay.

Select one

A. True

B. False

10. The term​ 'herd behaviour' refers​ to:

Select one

A. the way in which returns on various investment classes tend to converge

B. the way in which funds use fee structures to group customers together

C. the tendency for different fund managers to adopt the same portfolio mix

D. none of these.

Answer 1

9)

Managed investments have the advantage of professional managers willing to spend their time on equity analysis and portfolio management while the disadvantage comes in the form of expense ratios which is the fees that investors must pay.

Answer is A True

10)

Herd behavior in investment management refers to various fund managers herding around a schematic trend in portfolio, the reason being in the event of loss, all the entire herd goes down and reduces the loss aversion bias in managers.

Answer is C. the tendency for different fund managers to adopt the same portfolio mix