$[$Related to Solved Problem $6\mathrm{.}3]$ An article in the Wall Street Journal noted that in$2019,$ for the first$$ time, the total value of stocks held by index funds was greater than the total value of stocks held by actively managed funds. The article$$ observed, "The challenge to traditional stock pickers began more than four decades ago with Vanguard founder Jack$$ Bogle's introduction of the first index mutual fund for ordinary investors in$1976."$

What does the article mean by$$ "traditional stock$$ pickers"?

Part $2$

The article is referring to

$$

non$-$professional investors that participate in the market

those who buy particular stocks rather than index funds

$.$

Part $3$

$$Shouldn$\text{'}$t investors be able to earn a higher return by finding knowledgeable managers who can pick$$ high$-$performing individual stocks than by investing in index$$ funds?

Part $4$

A$.$

$$No$,$ the efficient markets hypothesis predicts that buying and selling in markets will eliminate opportunities for$$ above$-$average profits for even the smartest money manager.

B$.$

$$Yes$,$ knowledgable managers can consistently earn$$ above$-$average profits, but the cost of executing all of the required trades leads to a lower final return than simply investing in an index fund.

C$.$

$$Yes$,$ knowledgable managers can consistently earn$$ above$-$average profits, but the tax burden associated with owning individual stocks will lead to a lower final return than simply investing in an index fund.

D$.$

$$Yes$,$ knowledgable managers can consistently earn$$ above$-$average profits, however it is difficult to identify these managers and their fees can be extremely high.