Multiple choice

The Expense Ratio is not affected by

  1. fund size

  2. average account size

  3. portfolio composition

  4. stock market conditions

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Expense ratio is determined by fund operating costs (management fees, administrative expenses, custodial fees) relative to fund size. While fund size and account size create economies of scale, and portfolio composition affects custodial costs, stock market conditions do not change the fund's expense structure. Expenses are set by the fund manager and AMC, not market movements.