Asked by Candace Shields on Jun 19, 2024
Verified
Risk-adjusted mutual fund performance measures have decreased in popularity because
A) in nearly efficient markets, it is extremely difficult for portfolio managers to outperform the market.
B) the measures usually result in negative performance results for the portfolio managers.
C) the high rates of return earned by the mutual funds have made the measures useless.
D) in nearly efficient markets, it is extremely difficult for portfolio managers to outperform the market, and the measures usually result in negative performance results for the portfolio managers.
E) None of the options are correct.
Risk-Adjusted
A method or measurement that normalizes the performance of an investment by taking into account the amount of risk involved in producing its returns.
Mutual Fund Performance Measures
Metrics used to evaluate and compare the performance of mutual funds, including measures of risk, return, and the adjustment of performance for risk.
Nearly Efficient Markets
Markets where prices reflect all available information to some degree but may not always be perfectly efficient.
- Appreciate the importance of risk adjustment in measuring mutual fund performance.
Verified Answer
Learning Objectives
- Appreciate the importance of risk adjustment in measuring mutual fund performance.
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