Which of the following is correct?
A)Managed funds typically have a higher return than indexed funds.This tends to refute the efficient market hypothesis.
B)Managed funds typically have a higher return than indexed funds.This tends to support the efficient market hypothesis.
C)Index funds typically have a higher rate of return than managed funds.This tends to refute the efficient market hypothesis.
D)Index funds typically have a higher rate of return than managed funds.This tends to support the efficient market hypothesis.

Question

Quizplus · Accepted Answer

Index funds typically have a higher rate of return than managed funds. This tends to support the efficient market hypothesis, which posits that it is difficult to consistently beat the market by actively managing investments. Index funds passively track the market and therefore have lower fees and expenses compared to managed funds, which tend to have higher fees due to the active management of investments. This means that index funds are more likely to outperform managed funds over the long run, supporting the idea that markets are efficient and that it is difficult to consistently beat them.

Which of the Following Is Correct