Historical Returns Support Which One of the Following Statements

question 18

Multiple Choice

Historical returns support which one of the following statements?

• A)Financial markets are highly inefficient as suggested by behavioral finance.
• B)Professional money managers tend to outperform the Vanguard 500 index fund about 55 percent of the time on average.
• C)The longer the time span, the more apt a professional money manager is to outperform an index fund, such as the S&P 500.
• D)Historical data supports the statement that arbitrage is unlimited and results in a totally efficient market.
• E)The financial markets appear to be efficient because, on average, they outperform professional money managers.

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Definitions:

Consideration

The value (such as money, a service, or an item) promised in a contract that motivates the parties to enter into the agreement.

Negotiations

The process by which two or more parties communicate and compromise to reach a mutual agreement or resolve a dispute.

Revoked

The act of officially canceling or withdrawing something, such as a license, permission, or offer.

Lucy V. Zehmer

A landmark legal case in contract law where the Virginia Supreme Court held that a written agreement to sell land, made despite the seller's apparent intoxication, was enforceable.