- CFA Exams
- CFA Level I Exam
- Topic 7. Derivatives
- Learning Module 50. Derivative Benefits, Risks, and Issuer and Investor Uses
- Subject 1. Derivative Benefits and Risks
CFA Practice Question
The goal of a speculative investment strategy is to ______.
B. increase expected return by increasing risk
C. decrease expected return by decreasing risk
A. increase expected return by decreasing risk
B. increase expected return by increasing risk
C. decrease expected return by decreasing risk
Correct Answer: B
Speculators take on additional risk. In a well-functioning market, increased risk is associated with increased expected return.
User Contributed Comments 3
| User | Comment |
|---|---|
| johntan1979 | In layman's terms, to GAMBLE |
| ankurwa10 | Option A would make the whole market place redundant, wouldn't it? high risk, high return? Gotta take them chances you know. |
| ibrahim18 | I agree with @johntan1979. Real gamble |