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In a perfectly efficient market, an active strategy mutual fund that charges a 1% fee has about a 47% chance of beating the index net
In a perfectly efficient market, an active strategy mutual fund that charges a 1% fee has about a 47% chance of beating the index net of fee. In a universe of 5,000 funds, how many funds would you expect to beat the index all but once out of the past 5 years?
In other words, the fund would fail to beat the benchmark in one of the 5 years.
Enter answer accurate to two decimal places.
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