Studies of mutual fund performance indicate that mutual funds that outperformed the market in one time period
A) usually beat the market in the next time period.
B) usually beat the market in the next two subsequent time periods.
C) usually beat the market in the next three subsequent time periods.
D) usually do not beat the market in the next time period.

Question

Quizplus · Accepted Answer

Studies have shown that past performance is not a reliable indicator of future performance in mutual funds. Therefore, mutual funds that outperformed the market in the past do not necessarily continue to do so in the future. This implies that option D is the best choice as it accurately captures this phenomenon.

Studies of Mutual Fund Performance Indicate That Mutual Funds That