Strong-form efficiency implies that mutual fund managers:
A) Buy the index that maximizes diversification and minimizes cost of managing portfolios
B) Actively seek under performing stocks and buy them
C) Fund mangers can consistently earn superior returns year after year
D) None of the above

Question

Quizplus · Accepted Answer

Strong-form efficiency implies that all available information is reflected in the prices of securities, so mutual fund managers cannot consistently earn superior returns year after year by actively seeking under performing stocks and buying them.

Strong-Form Efficiency Implies That Mutual Fund Managers