- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 38. Analysis of Active Portfolio Management
- Subject 4. Applications of the Fundamental Law
CFA Practice Question
The more constraints we impose in portfolio construction, the ______ the information ratio.
B. lower
C. same
A. higher
B. lower
C. same
Correct Answer: B
Both the expected active return and the information ratio will be lower if there are more constraints imposed in portfolio construction.
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