If an investor believes that financial markets are inefficient, that argues for pursuing a more active portfolio strategy and purchasing exchange-traded funds instead of individual stocks.

Question

Quizplus · Accepted Answer

Believing in market inefficiency might encourage an active portfolio strategy, but it doesn't specifically argue for purchasing exchange-traded funds (ETFs) over individual stocks. Active management can involve both ETFs and individual stocks, depending on the strategy.

If an Investor Believes That Financial Markets Are Inefficient, That