8. (2 points) Suppose you are the chief investment offiffifficer at a fund. Two quantitative

researchers (A and B) work for you. Each of them propose an investment strategy

to you and you need to choose one to implement for your fund.

Here is some information about how these researchers found their strategies. After

backtesting 10 difffferent strategies, A found that the best one among the 10 deliv

ered 8% annual returns in historical data, and proposed that strategy to you. B also

proposes a strategy that also delivered 8% annual returns in historical data but she

is more thorough, as she backtested 25 difffferent strategies and picked the best one.

Your goal is to have the best opportunity to deliver good returns for your fund

going forward. Which one should you choose?

(a) The strategy proposed by researcher A.

(b) The strategy proposed by researcher B.

(c) It really doesnt matter as the two are equally good.