High fees:
A) are not likely to generate higher returns in the long run because of the efficient markets hypothesis.
B) are not likely to generate higher returns in the long run because of diversification issues.
C) can often signal a higher-quality management and thus higher returns in the long run.
D) have little impact on your long-run returns to investing.

Question

Quizplus · Accepted Answer

According to the efficient markets hypothesis, which argues that stock prices already reflect all available information, paying high fees to active fund managers is not likely to generate higher returns in the long run.

High Fees