From the Perspective of the Theory of Efficient Markets, Explain

question 70

Essay

From the perspective of the theory of efficient markets, explain why it may be difficult for professional money managers who have an exceptional year to continuously outperform the market average.

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Definitions:

Markets For Factors

The arena in which services of the factors of production (such as labor, capital, and land) are bought and sold.

Economic Models

Economic models are simplified representations of the complex realities of economic activities to predict future economic behavior and outcomes.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing among multiple options.

Opportunity Cost

The cost of foregone alternatives when one option is chosen over another.