Choose wisely. There is only one correct answer to each question.
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1.
If you see the letters MSCI in an index, you know you are dealing with what category of stocks?
International. The various MSCI indexes track international stocks.
2.
Which of the following types of index funds is typically the least tax efficient?
Small-cap index fund. The small-cap funds eventually have to sell stocks that have grown too large for their indexes, and this creates taxable capital gains.
3.
Which statement is false?
Index funds are all cheap. Given that index-fund managers aren't actively researching and selecting stocks, all index funds ought to be cheap.
4.
Which of the following types of index funds is usually most tax efficient?
Large-cap index fund. When large-cap funds need to sell stocks that become too small for their indexes, they do create taxable capital gains, but those gains are usually quite small.
5.
Which statement is true?
Index funds in the large-cap blend category can follow different indexes. Not all index funds are cheap--not even all large-blend index funds. Index funds in the large-blend category can follow different indexes--the most common of which is the SP 500.
