Investing in a mutual fund because of positive historical performance is a form of ___________,
A) trend analysis.
B) fundamental analysis.
C) portfolio bias.
D) selection bias.
E) None of the options are correct.

Question

Quizplus · Accepted Answer

Investing in a mutual fund because of its positive historical performance is an example of selection bias. This occurs when an investor makes a decision based on past performance without considering other factors that might affect future returns.

Investing in a Mutual Fund Because of Positive Historical Performance