Based on the Efficient Markets Hypothesis, Which of the Following

question 81

Multiple Choice

Based on the efficient markets hypothesis, which of the following mutual funds has the better chance of beating the market in the long run?

• A) a low-fee fund that is actively managed by a highly respected fund manager
• B) a passive fund that simply attempts to mimic a financial index such as the S&P 500
• C) a portfolio of stocks that you choose, since nobody has more incentive to manage your money correctly than you do
• D) Forget about it-it is nearly impossible to choose a fund that will systematically outperform the market.

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