You see an article in the newspaper that details the performance of mutual funds over the last five years Out of 5,600 actively managed mutual funds in the study, 104 outperformed the market in each of the last five years The author of the article argues that these mutual funds are examples of mark...

While intriguing this is not evidence of market inefficiency Think of flipping a coin and trying to ...

You see an article in the newspaper that details the performance of mutual funds over the last

Question:

You see an article in the newspaper that details the performance of over the last five years. Out of 5,600 actively managed in the study, 104 outperformed the market in each of the last five years. The author of the article argues that these are examples of market inefficiency. "If markets are efficient, you would expect to see outperforming the market for short periods of time. But when more than 100 are able to outperform the market in each of the last five years, you can no longer suppose that markets are truly efficient. Obviously, these 100 fund managers have figured out a way to beat the market every year." Do you think that this is evidence that markets are not efficient?
Mutual Funds
Mutual funds are like a pool of funds gathered by different small investors that have simalar investment perspective about returns on their investments. These funds are managed by professional investment managers who act smartly on behalf of the...