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Statistics

This fund family averaged 12 percent. Really?

survivorship-biasselection-biasfund-performance

A fund company advertises that its equity funds have averaged 12 percent a year over the past decade. The figure is computed across all the funds the company currently offers.

Why is this average likely overstated, and what would make it honest?

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Backfill Bias in Fund DatabasesBerkson's ParadoxColliders and Collider BiasThe Heckman Selection CorrectionRange Restriction in Selected Samples

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