Question

7. If you actively seek bargains in an efficient market, what would you expect see as the returns on your portfolio, relative to the market, over long periods? (3 points) You should earn a higher risk-adjusted return than the market You should earn the same risk-Cadjusted return as the market before transactions costs a b. c You should earn higher risk-Cadjusted return than the market before d You should earn lower risk-Cadjusted return than the market before transactions costs, but your extra costs will usually offset these returns transactions costs; after transactions costs, your portfolio will do worse.

Answer 1

3 years is the long term, where I expects good returns than market with limited volume of risk. Hence option A is correct, the remaining carries different opinions.

Hence the three options are wrong and right one is option A.