CFA Practice Question
Which of the following is likely incorrect about investment objectives?
A. Current Income requires that the return objective exceeds the expected inflation rate.
B. Total Return goal is to grow the capital base by capital appreciation and reinvestment of that appreciation.
C. Capital Preservation requires that at a minimum the return objective should equal the inflation rate.
Explanation: Capital Appreciation requires that the return objective exceeds the expected inflation rate. Current Income is when the client needs to generate income for expenses from investments.
User Contributed Comments 1
| User | Comment |
|---|---|
| smit0745 | One would think that any investment objective should require returns to exceed inflation |