Based on the efficient markets hypothesis, which of the following mutual funds has the better chance of beating the market in the long run?
A) a low-fee fund that is actively managed by a highly respected fund manager
B) a passive fund that simply attempts to mimic a financial index such as the S&P 500
C) a portfolio of stocks that you choose, since nobody has more incentive to manage your money correctly than you do
D) Forget about it-it is nearly impossible to choose a fund that will systematically outperform the market.

Question

Quizplus · Accepted Answer

The efficient markets hypothesis suggests that it is nearly impossible to consistently outperform the market because all available information is already reflected in stock prices. Therefore, no mutual fund or individual has a better chance of beating the market in the long run.

Based on the Efficient Markets Hypothesis, Which of the Following