Which one of the following statements is correct?
A)Professional money managers outperformed the Vanguard 500 Index Fund on an annual basis more than half the time for the period 1977-2011.
B)Purchasing and holding a broad-based index fund is a highly recommended means of investing.
C)The number of general equity mutual funds has decreased over the past 20 years due to their underperformance as compared to index funds.
D)The survivorship bias lowers the returns earned by professional money managers as a group.
E)In an efficient market, there is no need for professional money managers.

Question

Quizplus · Accepted Answer

Purchasing and holding a broad-based index fund is a highly recommended means of investing as it has been shown to outperform many actively managed funds over the long-term, while also reducing risk and keeping costs low. The other options are either incorrect or only partially correct.

Which One of the Following Statements Is Correct