Am I missing something here? It seems like the explanation agrees with both points which is choice A.
Its a douchebag question. They say that the goal is to get excess returns, not improve the risk/return profile of the portfolio. Currency picking (the one that appreciates, part II) increases returns, low correlations doesn’t increase return, it decreases risk. They only want stuff that results in excess return. FYI the 2011 mock is the hardest thing i’ve taken.