- CFA Exams
- CFA Level I Exam
- Study Session 3. Quantitative Methods (2)
- Reading 9. Common Probability Distributions
- Subject 9. 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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