Darnell and Eleanor are building their portfolios. Darnell purchases shares in a mutual fund and pays fees to a manager who actively manages the mutual fund's portfolio. He does so because he believes that the manager can identify inexpensive stocks that will rise in value. Eleanor is not convinced. She buys shares in an index funda type of mutual fund that simply buys all of the stocks in a given stock index rather than actively managing a portfolio. Eleanor builds her portfolio based on the notion that: The stock market exhibits informational efficiency. Stock analysts can use fundamental analysis to identify undervalued stocks. All stocks are overvalued.