Which One of the Following Statements Is Correct

question 60

Multiple Choice

Which one of the following statements is correct?

• A)Professional money managers outperformed the Vanguard 500 Index Fund on an annual basis more than half the time for the period 1986-2014.
• B)Purchasing and holding a broad-based index fund is a highly recommended means of investing.
• C)The number of general equity mutual funds has decreased over the past 20 years due to their underperformance as compared to index funds.
• D)The survivorship bias lowers the returns earned by professional money managers as a group.
• E)In an efficient market, there is no need for professional money managers.

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Definitions:

SSR

Sum of Squares due to Regression, representing the variation explained by the regression model.

SSE

Sum of Squares due to Error, a measure used in statistics to quantify the variance within a dataset, representing the discrepancy between the observed and estimated values.

Logistic Regression

A statistical method for analyzing datasets in which there are one or more independent variables that determine an outcome, which is categorical.

Dependent Variable

A variable in an experiment or study that is expected to change in response to changes in another variable, the independent variable.