Stock index rather than actively managing portfolio

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Shen and Valerie are building their portfolios. Shen purchases shares in a mutual fund and pays fees to a manager who actively manages the mutual fund's portfolio. He does so because he believes that the manager can identify inexpensive stocks that will rise in value. Valerie is not convinced. She buys shares in an index fund—a type of mutual fund that simply buys all of the stocks in a given stock index rather than actively managing a portfolio

Reference no: EM131098624

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