Testing market efficiency is often done using an examination of the performance of
A) professional investors
B) growth fund managers
C) academic researchers
D) market anomalies

Question

Quizplus · Accepted Answer

Testing market efficiency usually involves analyzing the performance of professional investors, such as mutual fund managers or hedge fund managers, and comparing it to the overall market. This is done to see if these investors are able to consistently outperform the market, or if their returns are similar to what one would expect from a random selection of stocks. This helps to determine if the market is efficient or not. Choice B is not the best answer because growth fund managers are a subset of professional investors and not necessarily representative of the broader market. Choice C is not the best answer because academic researchers may use market data to conduct studies, but they are not a direct measure of market efficiency. Choice D is not the best answer because market anomalies may exist regardless of market efficiency and do not necessarily provide a comprehensive evaluation of market performance.

Testing Market Efficiency Is Often Done Using an Examination of the Performance