- 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
Consider the following benchmark and managed portfolio.
B. 0.65%
C. 2.45%
What is the value added for the managed portfolio?
A. 0.45%
B. 0.65%
C. 2.45%
Correct Answer: C
The return on the managed portfolio: 0.75 x 15% + 0.25 x 2% = 11.75%
Active return =11.75% - 9.3% = 2.45%
The return on the benchmark: 0.70 x 12% + 0.3 x 3% = 9.3%
The return on the managed portfolio: 0.75 x 15% + 0.25 x 2% = 11.75%
Active return =11.75% - 9.3% = 2.45%
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