Most professionally managed equity funds __________.
A) outperform the S&P 500 index on both raw and risk-adjusted return measures
B) outperform the S&P 500 index on raw return measures and underperform the S&P 500 index on risk-adjusted return measures
C) underperform the S&P 500 index on both raw and risk-adjusted return measures
D) underperform the S&P 500 index on raw return measures and outperform the S&P 500 index on risk-adjusted return measures

Question

Quizplus · Accepted Answer

Studies have shown that most professionally managed equity funds tend to underperform the S&P 500 index on both raw and risk-adjusted return measures over the long term. One reason for this is the higher fees and expenses that come with actively managed funds, which can eat into returns. Additionally, the S&P 500 is a broad-based index that captures the performance of many different sectors and companies, which can be difficult for individual fund managers to replicate consistently. While there are some actively managed funds that may outperform the index in the short term, sustained outperformance over time is rare.

Most Professionally Managed Equity Funds __________