Studies of the Performance of Professionally Managed Mutual Funds Find

question 38

Multiple Choice

Studies of the performance of professionally managed mutual funds find that these funds:

• A) do not outperform a market index. Assuming mutual fund managers rely primarily on public information, this finding refutes the semistrong form of the efficient market hypothesis.
• B) do not outperform a market index. Assuming mutual fund managers rely primarily on public information, this finding supports the semistrong form of the efficient market hypothesis.
• C) outperform a market index. Assuming mutual fund managers rely primarily on public information, this finding refutes the semistrong form of the efficient market hypothesis.
• D) outperform a market index. Assuming mutual fund managers rely primarily on public information, this finding supports the semistrong form of the efficient market hypothesis.
• E) Both outperform a market index. Assuming mutual fund managers rely primarily on public information, this finding refutes the semistrong form of the efficient market hypothesis; and outperform a market index. Assuming mutual fund managers rely primarily on public information, this finding supports the semistrong form of the efficient market hypothesis.

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Definitions:

Degrees Of Freedom

The number of independent data points in a statistical calculation that are free to vary.

T-Distribution

A probability distribution that arises when estimating the mean of a normally distributed population in situations where the sample size is small and the standard deviation is unknown.

Student T-Distributed

Pertaining to a probability distribution that arises when estimating the mean of a normally distributed population in situations where the sample size is small and population standard deviation is unknown.

Sampled Population

The subset of a larger population that is selected for the purpose of a scientific study or statistical analysis.