Empirical evidence suggests that ________ mutual funds ________ funds.
A) actively managed; have lower returns than passively managed
B) passively managed; have equal returns to single stock price
C) actively managed; have lower "betas" than single stock
D) passively managed; are more likely to follow a random walk than actively managed
E) indexed; underperform compared to managed

Question

Quizplus · Accepted Answer

Empirical evidence has consistently shown that actively managed mutual funds typically have lower returns than passively managed funds. This is due to the higher fees associated with actively managed funds and the difficulty in consistently beating the market. Passively managed funds, such as index funds, typically have lower fees and have been shown to have equal or better returns compared to actively managed funds.

Empirical Evidence Suggests That ________ Mutual Funds ________ Funds

Empirical Evidence Suggests That Mutual Funds Funds