Multiple Choice
Which of the following arguments supporting passive investment strategies is (are) correct?
I. Active trading strategies may not guarantee higher returns but guarantee higher costs.
II. Passive investors can free-ride on the activity of knowledge investors whose trades force prices to reflect currently available information.
III. Passive investors are guaranteed to earn higher rates of return than active investors over sufficiently long time horizons.
A) I only
B) I and II only
C) II and III only
D) I, II, and III
Correct Answer:
Verified
Correct Answer:
Verified
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