There Appears to Be a Role for a Theory of Active

question 9

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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Definitions:

Universal Declaration of Human Rights

A foundational document adopted by the United Nations in 1948, outlining the rights and freedoms entitled to all human beings.

Military Industry

A sector of the economy involved in the production and sale of military weapons, equipment, and services.

Cold War

A period of geopolitical tension between the Soviet Union and its allies and the United States and its allies, characterized by threats, propaganda, and other measures short of open warfare, from the end of World War II until the dissolution of the Soviet Union.

Operation Dixie

A post-World War II campaign initiated by the American labor movement to unionize industrial workers in the southern United States.