- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 3. Probability Concepts
- Subject 10. Principles of Counting
CFA Practice Question
A portfolio manager has identified three asset classes, with 7, 9, and 6 securities, respectively. He wants to put together a portfolio of three securities, with no more than one security from each asset class. In how many ways can he achieve this?
A. 22
B. 96
C. 378
Explanation: This requires the multiplication rule of counting. Number of ways a portfolio can be created = 7 x 9 x 6 = 378.
User Contributed Comments 2
| User | Comment |
|---|---|
| lawlee | not very clear on this, anyone? |
| edrei7 | You have 3 slots for the securities. Each slot is unique since the manager wants different asset classes. This means that order does matter. Just the principle of counting: First slot (7 choices) * Second slot (9 choices) * Third slot (6 choices) |