Discussion Question

Your broker commented that well-managed firms are better investments than poorly managed firms. As evidence, your broker cited a recent study examining 100 small manufacturing firms that eight years earlier had been listed in an industry magazine as the best-managed small manufacturers in the country. In the ensuing eight years, the 100 firms listed have not earned more than the normal market return. Your broker continued to say that if the firms were well managed, they should have produced better-than-average returns. If the market is efficient, do you agree with your broker?

Leave a Comment

Your email address will not be published. Required fields are marked *