How easy is it for fund managers and investment management companies to outperform or "beat" the stock market once their fees are taken into account?
What will be an ideal response?
When a single stock is picked at random, there is a 50 percent chance that the stock willoutperform the total stock market in the next year. Consequently, it is possible to outperform the stock market in a single year even if the investment manager has no skill.It has been discovered that successful historical asset managers tend to perform no better in the next period than pure chance would predict.
A-head: INVESTMENT ACCOUNTS
Concept: Outperforming the stock market
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When there are sustained increases in real GDP over time, we say that the economy is undergoing
A) a recession. B) economic growth. C) massive changes in productive capacity. D) economic stagnation.
Which of the following is the largest measure of money in the United States?
A) Federal Reserve notes B) definitive money C) M1 D) M2
When an economy is not in equilibrium,
A) planned expenditures exceed production and income. B) there is no savings nor investment. C) government tax revenues equal planned government expenditures. D) production and income equal planned expenditures.
One advantage of automatic stabilizers over discretionary fiscal policy is that automatic stabilizers
A. have a greater multiplier effect than discretionary fiscal policy. B. are not subject to the timing problems of discretionary fiscal policy. C. do not produce a cyclical deficit as discretionary fiscal policy does. D. make the actual budget a better reflection of the condition of the economy than the standardized budget.