- CFA Exams
- CFA Level I Exam
- Study Session 17. Alternative Investments
- Reading 50. Introduction to Alternative Investments
- Subject 1. Alternative investments
CFA Practice Question
The return target of a portfolio manager is 7% over LIBOR. It looks like this is a:
B. alpha return.
C. absolute return.
A. beta return.
B. alpha return.
C. absolute return.
Correct Answer: C
There is no market rate to beat (LIBOR is a cash rate).
User Contributed Comments 3
| User | Comment |
|---|---|
| vatsal92 | When exact expected return is specified it should be Absolute Return. |
| ankurwa10 | Good question. Hinges on the fact that there no market benchmark (in the case of alpha) to compare with. |
| khalifa92 | absolute return objective like the one in IPS |