- CFA Exams
- CFA Level I Exam
- Study Session 12. Equity Investments (1)
- Reading 38. Market Efficiency
- Subject 2. Forms of Market Efficiency
CFA Practice Question
A portfolio manager who does not have access to superior analysts should focus on ______.
A. stocks with a low book-value to market-value ratio
B. exploiting known market anomalies such as calendar effects
C. minimizing turnover, transactions costs, and taxes, and maintaining a specified risk level
Explanation: In this case the portfolio manager must invest as if the markets were efficient. Thus, diversification, cost control, and tax management are the guiding principles.
User Contributed Comments 2
User | Comment |
---|---|
murli | Portfolio managers duty without Analyst! |
rocyang | most of them suck |