- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 4. Basics of Portfolio Planning and Construction
- Subject 4. Asset Allocation and Portfolio Construction
CFA Practice Question
Paired correlations of assets should be relatively ______ within an asset class and relatively ______ versus assets in other asset classes.
B. low, high
C. high, low
A. low, low
B. low, high
C. high, low
Correct Answer: C
An asset class should contain relatively homogeneous assets (high correlation) while providing diversification relative to other asset classes.
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