Which one of the following statements is correct? 1. Professional money managers

ID: 2780388 • Letter: W

Question

Which one of the following statements is correct?

1. Professional money managers outperformed the Vanguard 500 Index Fund on an annual basis more than half the time for the period 1986-2014.

2. Purchasing and holding a broad-based index fund is a highly recommended means of investing.

3. The number of general equity mutual funds has decreased over the past 20 years due to their underperformance as compared to index funds.

4. The survivorship bias lowers the returns earned by professional money managers as a group.

5. In an efficient market, there is no need for professional money managers.

Purchasing and holding a broad-based index fund is a highly recommended means of investing

the above is the answer

because index investing provides diversification and results in the return.

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