Explain Why the Market Portfolio Proxy May Not Be Efficient

question 43

Essay

Explain why the market portfolio proxy may not be efficient.

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Definitions:

Need for Competence

The desire to interact effectively with the environment, to master tasks, and to achieve proficiency.

Need for Achievement

A psychological trait that drives an individual to pursue and attain goals.

Intrinsic Motivation

Motivation driven by an interest or enjoyment in the task itself, and exists within the individual rather than relying on any external pressure.

Need for Competence

An individual's innate desire to be effective in dealing with the environment, feeling capable, and skilled.