Mutual funds show ____________ evidence of serial correlation, and hedge funds show ____________ evidence of serial correlation.
A)almost no; almost no
B)almost no; substantial
C)substantial; substantial
D)substantial; almost no

Question

Quizplus · Accepted Answer

Mutual funds typically show almost no evidence of serial correlation, which suggests that their returns are largely random from one period to the next. Hedge funds, on the other hand, often exhibit substantial evidence of serial correlation, indicating that their returns can be somewhat predictable based on past performance, possibly due to the use of more sophisticated trading strategies or the ability to take advantage of longer-term trends.

Mutual Funds Show ____________ Evidence of Serial Correlation, and Hedge