Which of the Following Is Not a Reason Why the Majority

question 26

Multiple Choice

Which of the following is not a reason why the majority of actively managed mutual funds underperform the averages?

• A)Significant expenses associated with actively managed funds to support analysts,portfolio managers,and other overhead costs as well as trading costs to shift investment holdings
• B)Mutual funds frequently keep 5 percent or more in cash for such reasons as meeting unusually larger redemptions
• C)The relative performance between categories does not differ substantially over extended periods of time
• D)Fund overhead expenses including direct management fees can provide benefits other than performance
• E)All of the above are reasons

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Definitions:

Leadership

The ability to guide, influence, or direct a group towards achieving a common goal.

Emotional Intelligence

The capacity to be aware of, control, and express one's emotions, and to handle interpersonal relationships judiciously and empathetically.

Common Sense

Sound practical judgment concerning everyday matters, or a basic ability to perceive, understand, and judge in a manner shared by nearly all people.

Imagination

The ability of the mind to be creative or resourceful, envisioning things not currently present or that do not exist.