The available evidence indicates that
A)about one-half of all managers of active mutual funds consistently outperform index funds.
B)outperforming the market on a consistent basis is extremely difficult to do.
C)there is little truth to the notion that there is a trade-off between risk and return.
D)there is little truth to the efficient markets hypothesis.

Question

Quizplus · Accepted Answer

Multiple studies have shown that consistently outperforming the market is extremely difficult and that the majority of actively managed funds underperform index funds over the long term. Therefore, option B is the most accurate statement. Option A is incorrect as the evidence shows that very few managers consistently outperform index funds. Option C is also incorrect as there is generally a positive correlation between risk and return. Option D is a matter of debate among economists and financial experts and is not a widely accepted fact.

The Available Evidence Indicates That