What are Index Funds and ETFs primarily designed for?

"Active trading in the stock market" "Short-term speculative investments" "Passive investment managed by professionals" "High-frequency trading by individual investors"

What is a key characteristic of Index Funds that attracts investors?

"They guarantee high returns regardless of market conditions" "They primarily focus on short-term trading strategies" "They offer the potential for long-term wealth creation" "They are only available to institutional investors"

How do Index Funds mitigate risk for investors?

"By investing exclusively in government bonds" "By diversifying investments across various asset classes" "By avoiding investments in the stock market altogether" "By concentrating investments in a single high-performing stock"

What is a distinguishing feature of ETFs compared to Index Funds?

"ETFs are not influenced by stock market fluctuations" "ETFs have higher expense ratios than Index Funds" "ETFs offer growth options similar to Index Funds" "ETFs provide greater transparency regarding investment allocation"

What is a potential drawback of investing in ETFs?

"They are not accessible to retail investors" "They are not subject to market risks" "They lack liquidity in the market" "Their value can be negatively impacted by bearish market trends"

Which investment option requires a DEMAT account?

"Index Funds" "ETFs" "Both Index Funds and ETFs" "Neither Index Funds nor ETFs"

What investment method is commonly used with Index Funds but not with ETFs?

"Lump-sum investment" "Systematic Investment Plans (SIPs)" "Direct stock purchases" "Real estate investment"

Which investment type generally incurs higher expense ratios?

"Index Funds" "ETFs" "Both have equal expense ratios" "Expense ratios are irrelevant for these investments"