True or False: A portfolio manager earned an average return of 9.32% per year over the last 10 yearscompared to 8.56% per year for the market benchmark (S&P 500 Index). It is fair for the portfolio manager to claim superior performance because he beat the market.

a. True b. False

The average return of a stock mutual fund over the last 12 years was 8.5 percent per year, comparedto 9.2 percent per year for the S&P 500. This is sufficient evidence to conclude that the mutual fund underperformed the S&P 500

.a. True, since both the fund and S&P 500 are composed of stocks

b. False, since the fund could just have been unlucky

c. True, since the conclusion is based on a long enough history

d. False, since the risk of the fund may not be equal to the risk of the S&P 500