If Mutual Funds Make Investments in Efficient

question 67

Multiple Choice

If mutual funds make investments in efficient
Financial markets, they

• A) cannot outperform the market consistently
• B) should not outperform the market consistently
• C) will underperform the market when securities prices decline
• D) primarily bear unsystematic risk

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Definitions:

Descriptive Term

A word or phrase that describes or characterizes an object, situation, or concept without expressing its inherent nature.

Diene

Organic compounds that contain two double bonds, often involved in polymer production and synthetic rubber manufacture.

Solvolysis

The breakdown of a chemical compound by reaction with a solvent.

Methanol

A simple alcohol with the formula CH3OH, used as a solvent and as an antifreeze in fuel.