Research of actively managed portfolios, managed by professional portfolio managers:Question 10Select one:a.indicates that one should not randomly select managed portfolios managed by professional portfolio managers.b.indicates that historical performance is a good indicator of future performance.c.indicates that professional management provides investors with superior market returns.d.indicates the majority of professional portfolio managers outperform the market.
Question
Research of actively managed portfolios, managed by professional portfolio managers:Question 10Select one:a.indicates that one should not randomly select managed portfolios managed by professional portfolio managers.b.indicates that historical performance is a good indicator of future performance.c.indicates that professional management provides investors with superior market returns.d.indicates the majority of professional portfolio managers outperform the market.
Solution
The research on actively managed portfolios, managed by professional portfolio managers:
a. Does not necessarily suggest that one should not randomly select managed portfolios. The selection should be based on various factors such as the investor's risk tolerance, investment goals, the manager's investment style, and the fees charged.
b. Does not always indicate that historical performance is a good indicator of future performance. While past performance can provide some insight, it is not a guarantee of future results due to the unpredictable nature of the markets.
c. Does not always indicate that professional management provides investors with superior market returns. While professional managers have expertise and resources that individual investors may not have, this does not guarantee superior returns.
d. Does not indicate that the majority of professional portfolio managers outperform the market. In fact, numerous studies have shown that a significant percentage of fund managers do not beat the market average over the long term.
Therefore, none of the options provided are entirely correct according to the majority of research on actively managed portfolios.
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