There Appears to Be a Role for a Theory of Active

question 78

Multiple Choice

There appears to be a role for a theory of active portfolio management because

• A) some portfolio managers have produced sequences of abnormal returns that are difficult to label as lucky outcomes.
• B) the "noise" in the realized returns is enough to prevent the rejection of the hypothesis that some money managers have outperformed a passive strategy by a statistically small,yet economic,margin.
• C) some anomalies in realized returns have been persistent enough to suggest that portfolio managers who identified these anomalies in a timely fashion could have outperformed a passive strategy over prolonged periods.
• D) a and b.
• E) a,b,and c.

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