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Practice Questions
How Expert Are Expert Stock Pickers? Practice Questions
1. Mutual fund managers tend not to beat the market over an extended period of time. Why?
*
a. Mutual fund managers aren't very smart.
b. Markets prices are always wise.
c. Market prices aggregate dispersed information that no single investor is likely to comprehend.
d. Mutual fund managers do beat the market.
2. True or false: Actively managed mutual funds usually have lower fees than passively managed mutual funds.
*
a. True.
b. False.
3. According to a study referenced in the video, of the top 25% of actively managed mutual funds in 2012, what percent were also ranked in the top 25% of performance 5 years later?
*
a. 25%.
b. 10%.
c. 1%.
d. None.
4. Suppose that 100 financial ‘experts’ were to flip a coin at the start of each new year. Those who flip ‘heads’ will say the market is going up this year and those who flip ‘tails’ will say the market is going down this year. Roughly what percent of these experts would have a perfect prediction streak 3 years in a row?
*
a. 50%.
b. 25%.
c. 22%.
d. 12%.
e. 10%.
f. 6%.
5. What percent of these experts would successfully predict the market’s direction at least 2 out of the 3 years by simply flipping a coin? (Hint: this question is tricky!)
*
a. 50%.
b. 25%.
c. 22%.
d. 12%.
e. 10%.
f. 6%.
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Money Skills
Course
(10 videos)
Investing
How Expert Are Expert Stock Pickers?
Practice Questions
Can You Beat the Market?
Practice Questions
Investing: Why You Should Diversify
Practice Questions
Who Is More Rational? You or the Market?
Practice Questions
Real Estate
(Coming Soon) Real Estate
Econ Duel: Rent or Buy?
Career
The Economics of Choosing the Right Career
Practice Questions
(Coming Soon) Navigating Career-Related Data
Practice Questions
Saving
The Miracle of Compound Returns
Practice Questions
(Coming Soon) Simple Saving Tips
