The number of independent investment opportunities

The number of securities in the benchmark

The number of asset classes in the portfolio

The number of analysts on the team

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Free CFA Portfolio Management Practice Questions & Answers

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Question 391

ETF — Tracking Error Tracking error measures:

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Question 392

Scenario Limits Scenario limits are used to:

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Question 393

Active risk is best described as:

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Question 394

According to the fundamental law, a manager can improve performance by:

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Question 395

Breadth refers to:

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Question 396

Tracking error increases when:

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Question 397

If a portfolio outperforms due to overweighting a factor with strong performance, this is:

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Question 398

A manager wants a portfolio that is barbelled—overweight at the short and long ends, underweight in the intermediate maturities. Which key rate duration profile is most consistent with this objective?

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Question 399

A risk report shows that a portfolio’s 5‑year key rate duration is significantly higher than that of its benchmark, while other key rate durations are similar. The portfolio manager is most likely:

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Question 400

A manager believes that: - Short‑term rates will remain stable. - Intermediate rates (around 5 years) will decline. - Long‑term rates will rise slightly. Which combination of duration and key rate positioning is most consistent with this view?

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Question 401

IR of 0.70 most likely:

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Question 402

According to the fundamental law, performance improves when:

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Question 403

Portfolio Construction — Stop-Loss Limits Stop-loss limits are designed to:

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Question 404

Tracking error measures:

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Question 405

If a manager overweighted a sector that outperformed, this is:

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Question 406

The interaction effect arises when:

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Question 407

Illiquid assets are most likely to:

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Question 408

Performance evaluation consists of:

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Question 409

The appraisal ratio measures:

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Question 410

Style drift occurs when:

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Question 411

A manager with high tracking error is most likely:

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Question 412

Coefficient (IC) The information coefficient measures:

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Question 413

Coefficient (TC) The transfer coefficient captures:

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Question 414

Active Management — Breadth & IR If a manager doubles the number of independent decisions while maintaining the same skill, the information ratio will:

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Question 415

Tracking difference measures:

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Question 416

Brinson model, the allocation effect measures:

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Question 417

Selection effect isolates:

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Question 418

Interaction effect arises when:

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Question 419

The appraisal ratio measures:

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Question 420

Performance appraisal evaluates:

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Free CFA Portfolio Management Practice Questions & Answers

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