- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 3. Market Efficiency
- Subject 1. The Concept of Market Efficiency
CFA Practice Question
In a highly efficient market, a(n) ______ strategy is preferable.
B. active investment
A. passive investment
B. active investment
Correct Answer: A
In such a market, superior, risk-adjusted returns are not achievable. A passive investment strategy incurs lower costs.
User Contributed Comments 4
| User | Comment |
|---|---|
| makisupa43 | Riiiiiiight. |
| abs013 | If that were true hedge funds wouldn't exist |
| timkalt | Moreover, the market can just adjust rapidly if active investors are present. |
| MathLoser | @abs013: Count how many hedge funds that can beat the market ?! |