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Basic Question 7 of 13
Which statement is false?
II. In a very inefficient market an active investment strategy is always preferable to a passive investment strategy.
I. In an efficient market, superior, risk-adjusting returns (net of all expenses) are not possible.
II. In a very inefficient market an active investment strategy is always preferable to a passive investment strategy.
User Contributed Comments 4
| User | Comment |
|---|---|
| czar | but isnt that in an efficient market only? Pls clarify |
| thekobe | you have to put a lot of attention at the word "always" |
| johntan1979 | What the heck with all these word plays... :( Always, may, except... As if the exam itself wasn't tough enough already |
| Inaganti6 | I feel like half the CFA is about paying attention to semantics. |
Thanks again for your wonderful site ... it definitely made the difference.
Craig Baugh
Learning Outcome Statements
describe market efficiency and related concepts, including their importance to investment practitioners
contrast market value and intrinsic value
explain factors that affect a market's efficiency
CFA® 2024 Level I Curriculum, Volume 3, Module 3.