- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 5. Portfolio Mathematics
- Subject 3. Shortfall Risk and Roy's Safety-First Criterion
CFA Practice Question
Shortfall risk is ______.
A. the risk that minimizes the probability that portfolio return falls below a threshold level
B. the risk that portfolio value will fall below some minimum acceptable level over some time horizon
C. maximum acceptable level of risk
Explanation: Shortfall risk is the risk that the portfolio value will fall below some minimum acceptable level over some time horizon.
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