Studies of the performance of professionally managed mutual funds ﬁnd that these funds:
A)do not outperform a market index.Assuming mutual fund managers rely primarily on
Public information, this ﬁnding refutes the semistrong form of the eﬃcient market
Hypothesis.
B)do not outperform a market index.Assuming mutual fund managers rely primarily on
Public information, this ﬁnding supports the semistrong form of the eﬃcient market
Hypothesis.
C)outperform a market index.Assuming mutual fund managers rely primarily on public
Information, this ﬁnding refutes the strong form of the eﬃcient market hypothesis.
D)outperform a market index.Assuming mutual fund managers rely primarily on public
Information, this ﬁnding supports the semistrong form of the eﬃcient market hypothesis.
E)Both C and D.

Question

Quizplus · Accepted Answer

The finding that professionally managed mutual funds do not outperform a market index, assuming they rely primarily on public information, supports the semi-strong form of the efficient market hypothesis. This is because the semi-strong form states that all publicly available information is already reflected in prices, and therefore, mutual fund managers cannot consistently beat the market by relying on public information alone.

Studies of the Performance of Professionally Managed Mutual Funds ﬁNd