How easy is it for fund managers and investment management companies to outperform or "beat" the stock market once their fees are taken into account?
What will be an ideal response?
When a single stock is picked at random, there is a 50 percent chance that the stock willoutperform the total stock market in the next year. Consequently, it is possible to outperform the stock market in a single year even if the investment manager has no skill.It has been discovered that successful historical asset managers tend to perform no better in the next period than pure chance would predict.
A-head: INVESTMENT ACCOUNTS
Concept: Outperforming the stock market
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Suppose the sweater manufacturing technology enables sweater makers to experience constant returns to scale over the range between 4,000 and 10,000 . If their long-run average total cost curve is U-shaped, what must be true? a. Long-run average costs will be lowest when the firm produces as many sweaters as possible
b. The total cost of producing 10,000 sweaters is more than the total cost of producing 11,000. c. The total cost of producing 2,000 sweaters is half the total cost of producing 4,000. d. The ATC of producing 3,000 sweaters is the same as the ATC of producing 11,000. e. Producing fewer than 4,000 or more than 10,000 sweaters is not efficient.
Use the table below to answer the following question.UnitsMaximum Willingness to PayMarket PriceMinimum Acceptable Price1$14$8$2212843108648885681064814If output is at 3 units, then the market ________ allocative efficiency and ________ productive efficiency.
A. does not achieve, does not achieve B. does not achieve, achieves C. achieves, achieves D. achieves, does not achieve