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Compare Active and Passive Management
Grade Level
DSST
DSSTPF.234 Compare Active and Passive Management
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An active fund has outperformed its benchmark for three straight years. Which DSST-relevant caution is best?
A
The fund must become passive after three good years.
B
Future outperformance is guaranteed because active managers have skill.
C
Past outperformance does not guarantee future outperformance, and fees still matter.
D
The benchmark should be ignored once an active fund outperforms.
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