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 semistrong 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 outperform a market index. Assuming mutual fund managers rely primarily on public information, this finding refutes the semistrong form of the efficient market hypothesis; and outperform a market index. Assuming mutual fund managers rely primarily on public information, this finding supports the semistrong form of the efficient market hypothesis.

Question

Quizplus · Accepted Answer

This finding supports the semistrong form of the efficient market hypothesis because if mutual fund managers cannot outperform a market index using public information, then the market must be efficiently pricing securities based on that information.

Studies of the Performance of Professionally Managed Mutual Funds Find