CFA Practice Question

There are 139 practice questions for this study session.

CFA Practice Question

The return target of a portfolio manager is 7% over LIBOR. It looks like this is a:

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
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