Passive portfolio managers attempt to "beat the market" by forming portfolios capable of producing actual returns that exceed risk-adjusted expected returns.

Question

Quizplus · Accepted Answer

Passive portfolio managers do not attempt to beat the market, but instead aim to replicate the performance of a specific market index or benchmark. They do not actively trade securities, but instead hold a diversified portfolio that mimics the selected index or benchmark. Therefore, their returns are expected to align with the market returns, rather than exceed them.

Passive Portfolio Managers Attempt to "Beat the Market" by Forming