Studies of the Performance of Professionally Managed Mutual Funds Find

question 29

Multiple Choice

Studies of the performance of professionally managed mutual funds find that these funds:

• A)do not outperform a market index.Assuming mutual fund managers rely primarily on public information, this finding refutes the semistrong form of the efficient market hypothesis.
• B)do not outperform a market index.Assuming mutual fund managers rely primarily on public information, this finding supports the semistrong form of the efficient market hypothesis.
• C)outperform a market index.Assuming mutual fund managers rely primarily on public information, this finding refutes the semistrong form of the efficient market hypothesis.
• D)outperform a market index.Assuming mutual fund managers rely primarily on public information, this finding supports the semistrong form of the efficient market hypothesis.
• E)Both C and D.

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Definitions:

Contribution Margin Ratio

A metric that shows what percentage of sales revenue is available to cover variable costs and contribute to fixed costs after all variable expenses have been covered.

Cost Structure

The composition of fixed and variable costs that a company incurs during the production of goods or services, affecting profitability.

CVP Chart

A graphical representation used in Cost-Volume-Profit analysis to show the relationship between costs, volume of sales, and profit.

Major Components

Principal parts or elements that form the larger system or structure.