***SPOILER 2007 CFA Exam*** In 2007 Q8 there is this question and it basically sums up all the portfolio managers; But I could have sweared that in a previous year’s exam or maybe on Schwesser I saw that you should only include the active managers and not the core nor enhanced index managers as part of the calculation. Anyone else come across this, or am I just having bad dream flashbacks…
I have not tried 2007 question but both could be correct: If they asked for total portfolio return = use all active and passive return. If they asked for portfolio active return = use only enchanced indexing and active mgr return to compute the portfolio active return and portfolio active risk.
If they ask for the Core portfolio - add passive + enhanced indexing. Is Enhanced Indexing considered part of a portfolio active return?
Enhanced indexing (the “core” in general) shouldn’t have active return or active risk. If I’m thinking of the right problem, that’s why it wasn’t included.
ozzy609 Wrote: ------------------------------------------------------- > Enhanced indexing (the “core” in general) > shouldn’t have active return or active risk. If > I’m thinking of the right problem, that’s why it > wasn’t included. Incorrect. Enhanced indexing DOES have active risk and return but not passive index. And it it used to compute the port return and risk. Check it out in Schweser textbook.
you are right, it shouldn’t have MUCH active return or active risk. But again, if I remember correctly, I think on this question the core was entirely passive.