Research studies have shown that
A)the correlation between how well a stock does one year and how well it does the next is significantly greater than zero.
B)managed mutual funds generally outperform indexed mutual funds.
C)people tend to be overconfident when making investment decisions.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Research studies have shown that people tend to be overconfident when making investment decisions. Option A is incorrect as studies have shown that there is no significant correlation between how well a stock does in one year and how well it does in the next. Option B is also incorrect as studies have shown that indexed mutual funds generally outperform managed mutual funds in the long run.

Research Studies Have Shown That