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Consider a world consisting of three stocks, A , B , and C . Each stock has 1 0 0 shares outstanding. The world consists

Consider a world consisting of three stocks, A, B, and C. Each stock has 100 shares outstanding. The world consists of 10 investors. Investor #1 is a passive indexer who holds 50% of the market. Evaluate the following statements, are they true or false, and (one sentence) why?
a) Investor #1 holds 50 shares each in A, B, C (no matter what the prices are).
b) Investors #2- #10, as a group, hold 50 shares each in A, B, C (no matter what the prices are).
c) It is possible that some of investors #2- #10 will have returns that are higher than market returns.
d) It is possible that all of investors #2- #10 will have returns that are higher than market returns.
e) If investor #2 holds 3 shares of stock A but nothing else, it is obvious that he is a fool. There is no conceivable rational reason for him to do this.
f) If investor #2 holds 3 shares of stock A but nothing else, then it is mathematically impossible that investors #3- #10 as a group are just holding stocks in proportion to their market capitalization. It is mathematically impossible for everyone except investor #2 to just hold the market or just hold index funds.

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