- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 38. Analysis of Active Portfolio Management
- Subject 1. Active Management and Value Added
CFA Practice Question
Suppose the return on a managed portfolio was 10% last year. For the same period, the benchmark portfolio return was 12%, while the market portfolio return was 11%. What's the value added of the managed portfolio?
B. -1%
C. -2%
A. 0%
B. -1%
C. -2%
Correct Answer: C
Value added is defined as the difference between the return on the managed portfolio and the return on a passive benchmark portfolio. 10% - 12% = -2%
User Contributed Comments 1
| User | Comment |
|---|---|
| thebkr777 | Hope this is on the test |