Details the performance of mutual funds over last five year

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Reference no: EM131912054

You see an article in the newspaper that details the performance of mutual funds over the last five years. You see that, 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 market inefficiency. "If markets are effi- cient, you would expect to see mutual funds outperforming the market for short periods of time. But when more than 100 mutual funds 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?

Reference no: EM131912054

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