Given That Markets Are Efficient,what Is the Most Logical Explanation

question 122

Multiple Choice

Given that markets are efficient,what is the most logical explanation of the fact that a portfolio manager can outperform the S&P 500 by 5% annually?

• A) The manager is an expert stock selector.
• B) The manager has relied on insider information.
• C) Stocks do not follow a random-walk pattern.
• D) The manager's results have not been adjusted for the riskiness of the portfolio.

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Definitions:

Dreams

A series of thoughts, images, and sensations occurring in a person's mind during sleep, often reflecting unconscious desires or concerns.

Duration

Duration refers to the length of time a particular event or condition lasts, measured from its beginning to its end.

Emotions

Complex psychological states that involve a subjective experience, a physiological response, and a behavioral or expressive response.

Reticular Activating System

A network of neurons located in the brainstem that is responsible for regulating wakefulness and sleep-wake transitions.