The implication of efficient capital markets and a lack of superior analysts have led to the introduction of
A) balanced funds.
B) naive funds.
C) January funds.
D) index funds.
E) futures options.

Question

Quizplus · Accepted Answer

The efficient capital markets theory suggests that it is difficult for investors to consistently outperform the market, making it hard for analysts to identify undervalued or overvalued stocks. Therefore, the introduction of index funds, which track a specific market index and do not rely on stock-picking skills, has become a popular investment choice among those who believe in the efficient market hypothesis. This allows investors to diversify their portfolio and achieve market returns without trying to beat the market.

The Implication of Efficient Capital Markets and a Lack of Superior