- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 3. Probability Concepts
- Subject 10. Principles of Counting

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**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.

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**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) |