Studies of mutual fund performance
A)indicate that one should not randomly select a mutual fund.
B)indicate that historical performance is not necessarily indicative of future performance.
C)indicate that professional management of the fund insures above market returns.
D)indicate that one should not randomly select a mutual fund and indicate that historical performance in not necessarily indicative of future performance.

Question

Quizplus · Accepted Answer

Studies of mutual fund performance generally suggest that choosing a mutual fund based on random selection or historical performance alone may not be the most effective approach. Therefore, option D, which combines both of these ideas, is the best choice. It highlights the importance of considering factors beyond chance when selecting a mutual fund and acknowledges that past performance is not a guarantee of future success. The statement about professional management providing above-market returns is not necessarily supported by most studies in the field.

Studies of Mutual Fund Performance