If the efficient market hypothesis is correct,then
A)index funds should typically beat managed funds,and usually do.
B)index fund should typically beat managed funds,but usually do not.
C)mutual funds should typically beat index funds,and usually do.
D)mutual funds should typically beat index funds,but usually do not.

Question

Quizplus · Accepted Answer

If the efficient market hypothesis is correct, all available information about a stock is already reflected in its current price, making it difficult for managed funds to consistently outperform the market. Index funds, on the other hand, simply track the performance of a stock index and do not rely on active management or stock picking, which makes them a more efficient option. Studies have shown that index funds typically perform better than managed funds, supporting choice A as the correct answer.

If the Efficient Market Hypothesis Is Correct,then