Intro

There are 10,000 mutual fund managers. 16 claim that they are the best, since their fund beat the relevant index every year for 6 years.

However, you think that markets are efficient and that the average fund manager is as likely to deliver a better performance than the index as to underperform the index, before fees.

Attempt 1/10 for 10 pts.

Part 1

What is the probability that the average single fund managers beats the index 6 years in a row (before fees)?

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Attempt 1/10 for 10 pts.

Part 2

How many fund managers would you expect to beat the index 6 years in a row if only luck and no skill was involved?

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Submit assignment