An index fund does not try to beat the market; it tries to match it, holding a small piece of every company in a chosen index rather than betting on which few will outperform. This modesty of ambition turns out to be a strength. Funds that actively pick stocks charge higher fees to pay the analysts doing the picking, and most of them fail to outperform a simple index fund over long stretches once those fees are subtracted. The index fund's advantage is not superior insight into which companies will thrive; it is simply spending less on the attempt to guess.
As used in the passage, the word modesty most nearly means
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Correct answer to question 120 (Paragraph Comprehension): a lack of ambition or overreach
Method
The passage describes the fund's approach as trying to match rather than beat the market, calling this modesty of ambition a strength, so the word means a lack of overreach, not poverty or shyness.
Updated: November 2026
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