Active funds management is consistent with the efficient market hypothesis.

Question

Quizplus · Accepted Answer

Active fund management involves trying to outperform the market by analyzing and selecting individual stocks or making market timing decisions. This goes against the efficient market hypothesis, which suggests that it is not possible to consistently outperform the market and that prices already reflect all available information. Passive fund management, such as index funds, is more consistent with the efficient market hypothesis as it simply replicates the market returns.

Active Funds Management Is Consistent with the Efficient Market Hypothesis