Port Management?

CFA Level I
#1

The manager of the Fullen Balanced Fund is putting together a report that breaks out the percentage of portfolio return that is explained by the target asset allocation, security selection, and tactical variations from the target, respectively. Which of the following sets of numbers was the most likely conclusion for the report? A) 90%, 6%, 4%. B) 70%, 25%, 5%. C) 33%, 33%, 33%. D) 50%, 40%, 10%.

#2

d?

#3

It should be A. Because target Asset Allocation explains about 90% of the variation in returns. - Dinesh S

#4

A) studies have shown that 90% of portfolio returns can be explained by asset allocation, so the answer must be

#5

A asset allocation usually accounts for 90% of returns

#6

yes it is A

#7

Yup, it is A.

#8

The correct answer is A…

#9

***Another one*** The slope of the capital market line (CML) is a measure of the level of: A) expected return over the level of inflation. B) risk over the level of excess return. C) inflation over the level of expected return. D) excess return per unit of risk

#10

D) Excess return per unit of risk

#11

agreed

#12

D for me too

#13

It is D. The slope of the CML indicates the excess return (expected return less the risk-free rate) per unit of risk.

#14

The correct Answer is D…

#15

***Yet Another one**** Which of the following statements about return objectives is FALSE? A) To achieve the capital appreciation objective, the nominal rate of return must exceed the rate of inflation. B) To achieve the capital preservation objective, the nominal rate of return must exceed the inflation rate. C) The total return objective is riskier than the current income objective. D) The total return objective is less risky than the capital appreciation objective.

#16

I think C.

#17

b?

#18

ill go with B although it might be C

#19

Correct Answer should be B To Achieve Capital Preservation, Portfolio Returns = Nominal Risk Free Rate of Return = Real RFR + Expected(Inflation) - Dinesh S

#20

Your answer: B was correct! To achieve the capital preservation objective, the nominal rate of return must equal the inflation rate. The total return objective is often thought to be riskier than the income objective, but less risky than the capital appreciation objective.