24 August 2026

Performance of Large-cap Active Funds

The topic provides context on market efficiency and investment performance relevant to understanding financial markets under GS3, though it is too niche for a direct question.

Questions

1. Analyze the concept of 'efficiently inefficient' markets and its implications for the performance of active fund management in India. 150 words
   Attempt this — 150 words in 8 min

   0 / 150 words 8:00 Reset
2. Discuss the challenges faced by active fund managers in consistently generating alpha. How do market structure and the role of luck influence investment outcomes for long-term financial planning? 250 words
   Attempt this — 250 words in 11 min

   0 / 250 words 11:00 Reset

Prelims

1. In the context of financial markets, what does the term 'Alpha' represent?

   1. A The excess returns generated by a portfolio over its benchmark
   2. B The total market capitalization of a fund
   3. C The risk-free rate of return on government securities
   4. D The commission charged by portfolio managers

2. According to the SPIVA report, what is the primary reason cited for the difficulty of active funds to consistently beat their benchmarks?

   1. A Government regulations on equity investments
   2. B The role of luck and the efficiently inefficient nature of markets
   3. C Lack of computational power among fund managers
   4. D High taxation on capital gains