Would increase in value or that they were particularly lucky

Reference no: EM131305322

An article in the Wall Street Journal noted that of the thousands of mutual funds investing in stocks or stocks and bonds, only 31 had managed to earn a higher rate of return than the S&P 500 in every year from 1999 through 2006.

a. Is it likely that the people managing these 31 mutual funds were particularly good at choosing stocks that would increase in value or that they were particularly lucky?

b. Would your answer to part (a) change if you learned that only 14 of these 31 mutual funds had a higher return than the S&P 500 in 2007? Briefly explain.

Reference no: EM131305322

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