High Fees

question 95

Multiple Choice

High fees:

• A) are not likely to generate higher returns in the long run because of the efficient markets hypothesis.
• B) are not likely to generate higher returns in the long run because of diversification issues.
• C) can often signal a higher-quality management and thus higher returns in the long run.
• D) have little impact on your long-run returns to investing.

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Definitions:

Classical Probability

Classical probability is a theoretical probability calculation based on the assumption that all outcomes are equally likely and there are a finite number of outcomes.

Choosing

The process of making a selection from a range of options or possibilities.

Week

A time unit consisting of seven days.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1 where 0 indicates impossibility and 1 indicates certainty.