Let’s say you believe the market is not that efficient. Then how do you explain why...
Let’s say you believe the market is not that efficient. Then how do you explain why the vast majority of hedge fund and mutual funds do not beat the market when fees are accounted for?
Efficient market theory
Homework Answers
The hedge funds and mutual funds charge fees for professionally managing our funds. They use their expertise by choosing stocks in the portfolio which are expected to beat the market. Once, we calculate the return generated from our portfolio less the fees charged by these agencies we find that the in net result , we have not been able to beat the market.
Thus, a major drawback of these agencies is the high amount of fees charged for providing services.So, the investment fees are the major barriers to beating the market.
Add Answer to:
Let’s say you believe the market is not that
efficient. Then how do you explain why...
How can you explain why some mutual fund managers out-perform the market by the efficient market...
How can you explain why some mutual fund managers out-perform the market by the efficient market hypothesis? The answer is one word.
The Rule of 70 applies in any growth rate application. Let’s say you have $1000 in...
The Rule of 70 applies in any growth rate application. Let’s say you have $1000 in savings and you have three alternatives for investing these funds. How long would it take to double your savings in each of these 3 accounts? Show your answers. • A savings account earning 1.5 % interest per year • A U.S. Treasury bond mutual fund earning 3.5% interest per year • A stock market mutual fund earning 9% interest per year
In a perfectly efficient market, an active strategy mutual fund that charges a 1% fee has...
In a perfectly efficient market, an active strategy mutual fund that charges a 1% fee has about a 47% chance of beating the index net of fee. In a universe of 5,000 funds, how many funds would you expect to beat the index all but once out of the past 9 years? In other words, the fund would fail to beat the benchmark in one of the 9 years Enter answer accurate to two decimal places
If you believe the market is not semi-strong form efficient or strong form efficient, you should...
If you believe the market is not semi-strong form efficient or strong form efficient, you should engage in which of the following? A.Trade stocks base on insider information B. Conduct fundamental analysis to find undervalued stocks C. Read stock price charts D. Trade on insider information and conduct fundamental analysis E. Buy market index mutual funds.
QUESTION 16 In a perfectly efficient market, an active strategy mutual fund that charges a 1%...
QUESTION 16 In a perfectly efficient market, an active strategy mutual fund that charges a 1% fee has about a 47% chance of beating the index net of fee. In a universe of 5,000 funds, how many funds would you expect to beat the index all but once out of the past 5 years? In other words, the fund would fail to beat the benchmark in one of the 5 years. Enter answer accurate to two decimal places.
Do you think that markets are mostly competitive and, therefore, efficient or do you believe that...
Do you think that markets are mostly competitive and, therefore, efficient or do you believe that there is substantial market power that leads to inefficiencies? Why? Explain fully in detail
how a mutual fund is structured. Make sure to explain why mutual fund fee's may or may not be worth the cost to you. Comment on why you might want to invest in a mutual fund instead of a good stoc...
how a mutual fund is structured. Make sure to explain why mutual fund fee's may or may not be worth the cost to you. Comment on why you might want to invest in a mutual fund instead of a good stock. Do not take any short cuts answering this question this week, I want detail. This is the investment tool that most individuals use. The companies provide detailed information for you to review every month. There are many types of...
1) Do you believe the US health care system is production efficient? Explain. 2) Do you...
1) Do you believe the US health care system is production efficient? Explain. 2) Do you believe the US health care system is allocatively efficient? Explain.
can someone help me with this? Do you believe paying loads for investing in mutual funds...
can someone help me with this?
Do you believe paying loads for investing in mutual funds is worthwhile? Why or why not? What should be your approach to costs within a 401K plan? What factors should you consider? Does your employer provide low-cost mutual fund selections? Is it important? What are the tax implications for both bf these funds based on turnover?
What does the efficient market hypothesis (EMH) say about securities prices, their reaction to new information,...
What does the efficient market hypothesis (EMH) say about securities prices, their reaction to new information, and investor opportunities to profit? What is the behavioral finance challenge to this hypothesis? Do you personally believe the EMH argument or the behaviorist argument?
In a perfectly efficient market, an active strategy mutual fund that charges a 1% fee has about a 47% chance of beating the index net of fee. In a universe of 5,000 funds, how many funds would you expect to beat the index all but once out of the past 9 years? In other words, the fund would fail to beat the benchmark in one of the 9 years Enter answer accurate to two decimal places
QUESTION 16 In a perfectly efficient market, an active strategy mutual fund that charges a 1% fee has about a 47% chance of beating the index net of fee. In a universe of 5,000 funds, how many funds would you expect to beat the index all but once out of the past 5 years? In other words, the fund would fail to beat the benchmark in one of the 5 years. Enter answer accurate to two decimal places.
can someone help me with this?
Do you believe paying loads for investing in mutual funds is worthwhile? Why or why not? What should be your approach to costs within a 401K plan? What factors should you consider? Does your employer provide low-cost mutual fund selections? Is it important? What are the tax implications for both bf these funds based on turnover?
Most questions answered within 3 hours.
-
1. An object weighing 40 N rests on a surface. The coefficient
of friction is 0.35....
asked 54 minutes ago -
Investor company owns 35% of investee company voting stock and
accounts for the investment under the...
asked 1 hour ago -
The number of major faults on a randomly chosen 1 km stretch of
highway has a...
asked 2 hours ago -
Consider the competitive environment of Starbuck's, Progressive
Insurance, a manufacturing firm with low turnover, or a...
asked 3 hours ago -
3. Gains from trade
Consider two neighbouring island countries called Euphoria and
Contente. They each have...
asked 5 hours ago -
A business executive has the option to invest money in two
plans: Plan A guarantees that...
asked 7 hours ago -
Hello, can someone please help me answer this question?
How much heat is absorbed by a...
asked 7 hours ago -
. A marketing researcher conducted a survey of 25 shoppers
randomly selected at the local mall...
asked 7 hours ago -
Create an comprehensive response to the
following:
Antimicrobial agents work on a multitude of microbes (bacteria,...
asked 7 hours ago -
6.13 LAB: Step counter. Section 6.3.
A pedometer treats walking 2,000 steps as walking 1 mile....
asked 7 hours ago -
(14.2) A block of mass m = 10 kg riding on a frictionless
horizontal plane is...
asked 7 hours ago -
Use any search engine to search for articles about Starbucks
partnership with Tata Companies in India...
asked 7 hours ago