Multiple choice

A steady holding of investments in an equity fund's portfolio indicates

  1. long-term orientation

  2. lower transaction costs

  3. both the above

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A steady portfolio indicates low turnover, which suggests long-term investment orientation rather than active trading. Lower portfolio turnover reduces transaction costs like brokerage, taxes, and market impact. Both benefits accrue from stable holdings - long-term perspective and cost efficiency. This is characteristic of a disciplined buy-and-hold approach.

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