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Free CFA Portfolio Management Practice Questions & Answers

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Question 481

A portfolio has 2% active return and 5% tracking error. IR?

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Question 482

A manager earns sector allocation effect of +0.4% and security selection effect of −0.2%. Total active return?

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Question 483

A portfolio has 4% active return and 2% allocation effect. Selection effect?

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Question 484

A portfolio has 2% tracking error and IR = 0.6. Expected active return?

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Question 485

A portfolio has 3% allocation effect and −1% selection effect. Total active return?

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Question 486

In Brinson–Fachler attribution, the allocation effect for sector i is:

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Question 487

In Brinson–Fachler, the selection effect for sector i is:

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Question 488

A portfolio has one sector with (w_P = 30%), (w_B = 20%), (R_{Bi} = 8%), (R_B = 6%). Allocation effect for that sector is:

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Question 489

In multi‑period attribution, geometric linking is preferred because:

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Question 490

Carino linking adjusts attribution effects to:

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Question 491

Multi‑currency attribution decomposes return into:

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Question 492

Interaction effect in Brinson attribution is:

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Question 493

A portfolio has allocation effect 0.3%, selection effect 0.5%, interaction effect −0.1%. Total active return?

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Question 494

Geometric attribution is preferred because:

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Question 495

A synthetic ETF’s main risk is:

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Question 496

Multi‑currency attribution: currency effect equals:

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Question 497

Interaction effect in attribution is large when:

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Question 498

A steep yield curve most likely indicates:

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Question 499

An inverted yield curve most commonly signals:

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Question 500

ETF — Premium/Discount An ETF trades at a premium when:

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Question 501

Equities tend to offer a positive risk premium primarily because:

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Question 502

The largest risk to commercial real estate cash flows is typically:

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Question 503

Under pure expectations theory, an upward‑sloping yield curve implies:

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Question 504

A 5‑year government bond in a developing economy yields ( 9.5% ). The central bank’s inflation target is ( 4% ), and long‑run expected inflation is anchored at the target. The equilibrium real rate is estimated at ( 3.5% ). The remaining yield is best interpreted as:

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Question 505

If the liquidity preference theory holds, and the observed 3‑year spot rate is higher than the average of expected future 1‑year short rates over the next three years, this most likely implies that:

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Question 506

Key rate duration is most useful for:

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Question 507

A portfolio manager is concerned that the yield curve may steepen, with long‑term rates rising and short‑term rates falling. To best assess the portfolio’s risk to this scenario, the manager should rely primarily on:

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Question 508

A portfolio has an effective duration of 6.0 and a 10‑year key rate duration of 4.0. If the yield curve experiences a twist where short‑term rates fall and long‑term rates rise, which statement is most accurate?

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Question 509

A portfolio is constructed to have the same effective duration as the benchmark but a different key rate duration profile. This most likely indicates that the manager is:

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Question 510

Assets that perform poorly during economic downturns typically require:

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Free CFA Portfolio Management Practice Questions & Answers

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