Active investment management may at times generate additional returns of about .1%. however, the standard deviation of the typical well-diversified portfolio is about 20%, so it is very difficult to statistically identify any increase in performance." even if true, this statement is an example of the problem in deciding how efficient the markets are. a. magnitudeb. selection biasc. lucky eventd. allocation

A. magnitude

Explanation:

As on the correct level it is very difficult to estimate the correct effect of all the changes in portfolio returns, this is because the magnitude is not properly identified.

Thus, here in the give case also the problem is of magnitude that the results can not be predicted properly and there is slight fluctuation.

This is a problem that is common with each portfolio, as the market is changing with unavoidable consequences, accordingly the results are also changing unavoidably.

answer; ///(c) i believe its it ignores cash flows following the payback period;

answer; burned it;