CFA Practice Question

There are 136 practice questions for this study session.

CFA Practice Question

If you note that your active manager is using the number of securities as the breadth and these securities are all in one industry, you can conclude that your active manager is overstating ______.

I. breadth
II. expected active returns
III. information coefficient
IV. information ratio
V. active risk
Correct Answer: I, II, and IV

The active returns of securities are likely to be correlated. The breadth is lower than the number of securities.

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