n NISM Certifications
V-A NISM Series V-A
Medium

Usually, active funds give higher returns as investors bear a higher fund management expense - State True or False?

Practice question from Nism VA Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. False

    Correct answer

  2. B

    True

Why this is the answer

Higher fund management expenses do not necessarily result in better returns. In fact, passive funds like index funds can sometimes outperform active funds over time because they track an index and have lower fees. Active fund managers may make incorrect investment decisions that harm returns, leading to underperformance.

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