Which fund aims to mirror a broad market index's performance?

• A. Stock
• B. ETF
• C. Index Fund
• D. Mutual Fund

Answer: (C)

Index funds are built to replicate the performance of a broad market index by holding the same stocks in the same proportions as the index. This passive approach aims for returns that track the index itself, after fees. Because its goal is to mirror the market rather than outperform it, it’s the most fitting choice when the question asks for a fund designed to follow a broad index. A single stock cannot track the whole market, and while an ETF can track an index, it’s not defined by that mirroring goal in the same way; a mutual fund could be actively managed or passively managed, but not all are designed to mirror a broad index.