Describe two advantages and two disadvantages.
Is this a fair question?
Describe two advantages and two disadvantages.
Is this a fair question?
Every question is fair.
Advantages - Low fees, low tracking error
Disadvantages - Difficult to implement, lower expected return than the index
advantages
disadvantages
Hard to imagine seeing such an open-ended question like this on the AM section. They would have to at least give you some kind of clue as to what type of bond indexing we are talking about. Then you could at least limit your answers.
But I could easily picture this kind of vague question showing up on the PM section.