Two advantages of resampled efficient frontier (vs. traditional)

CFA Level III
#1

(4 mins questions)

If I only put two words

  • stable

  • diversified

How many credit can I get? 2/4, 3/4 or 4/4? Thanks.

#2

What is stable? Its the optimal portfolio weights that are stable through time

What is diversified? Its the optimal portfolio that is diversified, compared to the optimal portfolio generated from the MVO.

I think you get 0/4 or 0.5/4 for those answers.

#3

^ good point. I tried to eliminate unnecessary word…Hmmm…

How about below:

  • Portfolio is more diversifed

  • Portfolio is more stable

3/4?, for stable part, we must specifiy portfolio weight?

#4

This would be my answer too… I hope that would get full marks…but who knows…?

#5

I hope blinxbuckles is willing to grade it again smiley