Actively Managed Funds Find It Difficult to Consistently Earn Higher

Actively managed funds find it difficult to consistently earn higher risk-adjusted returns than a broad stock market index. The difference in return between actively managed funds and passively managed index funds can be explained by which of the following?
I. Lower expense ratios at index funds
II. Higher turnover ratios at index funds
III. Differences in returns in sectors of the market and the overall market return

A) II only
B) I and III only
C) I and II only
D) II and III only
E) I,II,and III

Correct Answer:

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