In 1990, the performance of the pros was abnormally poor, because 90% of all equity mutual funds underperformed a submissively handled index funds. To determine : How does the given fact tolerate on the problems of market efficiency . Introduction: Index funds: It is a type of mutual fund with a portfolio is constructed to match or track the elements of a market index such as, S&P 500. The index funds offers wide market exposure, lessen operating expenditure and reduced portfolio turnover.

Question

Want to see the full answer?

Answer 1

Question

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 22, Problem 6CRCT

Summary Introduction

Case summary:

In 1990, the performance of the pros was abnormally poor, because 90% of all equity mutual funds underperformed a submissively handled index funds.

To determine: How does the given fact tolerate on the problems of market efficiency.

Introduction:

Index funds:

It is a type of mutual fund with a portfolio is constructed to match or track the elements of a market index such as, S&P 500. The index funds offers wide market exposure, lessen operating expenditure and reduced portfolio turnover.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

What is Exploratory Research Case Study? What is the main purpose of Exploratory Research?

please help with how to solve this thank you.

please help in the steps to solve this

Answer 2

Question

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 22, Problem 6CRCT

Summary Introduction

Case summary:

In 1990, the performance of the pros was abnormally poor, because 90% of all equity mutual funds underperformed a submissively handled index funds.

To determine: How does the given fact tolerate on the problems of market efficiency.

Introduction:

Index funds:

It is a type of mutual fund with a portfolio is constructed to match or track the elements of a market index such as, S&P 500. The index funds offers wide market exposure, lessen operating expenditure and reduced portfolio turnover.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 22, Problem 6CRCT

Summary Introduction

Case summary:

In 1990, the performance of the pros was abnormally poor, because 90% of all equity mutual funds underperformed a submissively handled index funds.

To determine: How does the given fact tolerate on the problems of market efficiency.

Introduction:

Index funds:

It is a type of mutual fund with a portfolio is constructed to match or track the elements of a market index such as, S&P 500. The index funds offers wide market exposure, lessen operating expenditure and reduced portfolio turnover.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 22, Problem 6CRCT

Summary Introduction