Malkiel (1995)calculated that the average alphas,or abnormal returns,on a large sample of mutual funds between 1972 and 1991 were
A) significantly positive.
B) significantly negative.
C) statistically indistinguishable from zero.
D) positive before 1981 and negative thereafter.
E) negative before 1981 and positive thereafter.

Question

Quizplus · Accepted Answer

Malkiel's calculation showed that the average alphas or abnormal returns on a large sample of mutual funds between 1972 and 1991 were statistically indistinguishable from zero. This implies that mutual fund managers were unable to consistently outperform the market on a risk-adjusted basis during this period.

Malkiel (1995)calculated That the Average Alphas,or Abnormal Returns,on a Large