Which One of the Following Statements Is Correct

question 25

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 1977-2011.
• 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:

Social Change

The transformation over time of cultural norms, values, societal structures, and behaviors, often driven by conflict, innovation, and geopolitical shifts.

Crazes

Intense but short-lived fads or trends that capture a large following or great enthusiasm for a brief period.

Fads

Temporary, highly popular trends or behaviors that spread quickly and are followed with enthusiasm, but fade away just as quickly.

Demographic Shifts

Changes in the characteristics of a population over time, which can include age, ethnicity, gender distribution, and so forth.