Actively Managed Mutual Funds Usually Fail to Outperform Index Funds

question 152

True/False

Actively managed mutual funds usually fail to outperform index funds, and this fact provides evidence in favor of the efficient markets hypothesis.

---

Definitions:

Statistically Significant

A term indicating that the observed effect or relationship in data is unlikely to be due to chance, based on a predetermined significance level.

Null Hypothesis

An initial assumption which posits that no meaningful variance or impact exists, serving as the basis for beginning statistical analysis.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, commonly denoted as alpha (α) and used as a threshold for determining statistical significance.

Statistically Significant

A determination that a relationship observed in a dataset is unlikely to have occurred by chance, according to a predefined significance level.