- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 41. Using Multifactor Models
- Subject 3. Multifactor Models: Selected Applications
CFA Practice Question
Here are three portfolios constructed by your investment firm:
If you want to hedge an existing positive exposure to inflation risk, you would ______.
A. long portfolio B
B. short portfolio A
C. short portfolio C
Explanation: Portfolio C is a factor portfolio for inflation risk. It is thus the efficient for hedging existing exposure to inflation risk.
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