Strong-Form Efficiency Implies That Mutual Fund Managers

question 30

Multiple Choice

Strong-form efficiency implies that mutual fund managers:

• A) Buy the index that maximizes diversification and minimizes cost of managing portfolios
• B) Actively seek under performing stocks and buy them
• C) Fund mangers can consistently earn superior returns year after year
• D) None of the above

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Definitions:

Redefined Role

A significant change in how a position, function, or concept is understood, characterized, or executed within a specific context or by society at large.

John Maynard Keynes

A British economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments.

Economic Theories

A set of principles that explain the workings of and interactions within economies, influencing policies and understanding of wealth distribution.

Balanced Budgets

Financial planning or policy where total revenues are equal to or greater than total expenses within a specific period, preventing deficits.