Investors avoid this stock because returns trail the index. Therefore returns will keep trailing. Flaw?
AInvestors are wrong.
BIndex changes monthly.
CInvestors are not analysts.
DPast performance does not predict future.
Answer & Solution
Correct answer: D. Past performance does not predict future.
1. Inferring future from past returns is a known fallacy.
_Source: 501-GMAT-Questions Ch 2 Critical Reasoning_