A great deal of the literature in financial economics contains the assumption that returns are a linear function of a set of observable factors. The specification of the variables in the linear process (known as the return-generating process) is one of the key issues in finance today. The...

This is the first study to examine both how well plan administrators select funds and howparticipants react to plan administrator decisions. We find that on average administrators select funds that outperform randomly selected funds of the same type. When administrators change offerings, they...