Which One of the Following Statements Is Correct

question 57

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 1977-2009.
• 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:

Theoretical Standards

These are rigorous, often idealized cost and efficiency standards based on perfect operating conditions, used for comparison and performance analysis.

Ideal Standards

Benchmarks used in managerial accounting that represent optimal levels of performance under perfect operating conditions.

Normal Standards

Benchmarks or norms established for a business process or operation that are considered to be a typical or expected level of performance.

Total Manufacturing Cost Variance

The difference between actual manufacturing costs and the standard costs of those manufactured items.