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.
Homework Answers
As per Efficient Market Hypothesis, Shares will Always be traded at their Fair Value or Intrinsic Value. Mutual Funds, when analyse that some stocks are NOT traded at Fair Value, they Buy them, and later when their Fair Value is realized, they make returns. Due to their Active Participation in the market, they can pick right stocks AT RIGHT TIME, and hence, can beat the market or out perform the market.
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How can you explain why some mutual fund managers out-perform
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QUESTION 16 In a perfectly efficient market, an active strategy mutual fund that charges a 1%...
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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
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