Based on the Efficient Markets Hypothesis, Which of the Following

question 81

Multiple Choice

Based on the efficient markets hypothesis, which of the following mutual funds has the better chance of beating the market in the long run?

• A) a low-fee fund that is actively managed by a highly respected fund manager
• B) a passive fund that simply attempts to mimic a financial index such as the S&P 500
• C) a portfolio of stocks that you choose, since nobody has more incentive to manage your money correctly than you do
• D) Forget about it-it is nearly impossible to choose a fund that will systematically outperform the market.

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Definitions:

GLP-1

Glucagon-like peptide-1, a hormone involved in the regulation of blood sugar levels and often targeted in the treatment of type 2 diabetes.

Metabolism

An organism’s chemical and physical breakdown of food and the process of converting it into energy. Also, an organism’s biochemical transformation of various substances, as when the liver breaks down alcohol into acetylaldehyde.

Appetite

The natural desire to satisfy a bodily need, especially for food.

Lateral Hypothalamus

A region of the brain involved in controlling hunger, thirst, and other physiological functions.