Answer: B The answer is B.

Index funds are a new type of fund that have appeared since the 1970s. Their characteristic is that the investment portfolio imitates a certain stock price index or bond index, and the income fluctuates with the current price index.

When the price index rises, fund returns increase.

The advantages of index funds are: (1) Low fees.

Index funds have lower management fees, especially lower transaction fees.

(2) The risk is small.

Because index funds are so diversified, unsystematic risk from a portfolio can be completely eliminated.

(3) In a market dominated by institutional investors, index funds can obtain the market average rate of return and provide relatively stable investment returns for stock investors.

(4) Index funds can be used as a tool for hedging and arbitrage.

For investors, especially institutional investors, index funds are an important tool for hedging and arbitrage.