It is very hard to statistically verify abnormal fund performance because of all except which one of the following?
A) Inevitably some fund managers experience streaks of good performance that may just be due to luck
B) The noise in realized rates of return is so large as to make it hard to identify abnormal performance in competitive markets
C) Portfolio composition is rarely stable long enough to identify abnormal performance
D) Even if successful, there is really not much value to be added by active strategies such as market timing

Question

Quizplus · Accepted Answer

The other options (A, B, and C) all acknowledge difficulties in verifying abnormal fund performance, but option D suggests that even if successful, active strategies such as market timing may not provide much added value, which is not directly related to the stated difficulties. Therefore, option D does not belong with the others in addressing the question at hand.

It Is Very Hard to Statistically Verify Abnormal Fund Performance