0 Vipul@123Intermediate Asked: January 25, 20222022-01-25T02:01:34+05:30 2022-01-25T02:01:34+05:30In: Equity (CFA L1) equities 0 plzz solve this ans is ‘C’ Share Sorry, you do not have permission to answer to this question. 1 Answer Oldest Dhwani Motiani Asst. Mod. Asst. Moderator 2022-01-25T10:37:23+05:30Added an answer on January 25, 2022 at 10:37 am The answer here should be OPTION C, we are given the return on passive strategy i.e. the return of the benchmark = 15% now, strong form market efficiency means that both technical and fundamental analysis are of no use in the markets to generate higher returns. In the question, they are asking us about the gross return i.e. the return which we will generate is we DO NOT exclude the fees given i.e. 2% so, the gross return will be 15 + 2 = 17% And net return will be 15 % only to be consistent with the strong form market efficiency.
The answer here should be OPTION C,
we are given the return on passive strategy i.e. the return of the benchmark = 15%
now, strong form market efficiency means that both technical and fundamental analysis are of no use in the markets to generate higher returns.
In the question, they are asking us about the gross return i.e. the return which we will generate is we DO NOT exclude the fees given i.e. 2%
so, the gross return will be 15 + 2 = 17%
And net return will be 15 % only to be consistent with the strong form market efficiency.