- CFA Exams
- CFA Level I Exam
- Study Session 17. Portfolio Management (2)
- Reading 47. Analysis of Active Portfolio Management
- Subject 3. The Fundamental Law of Active Management
CFA Practice Question
The breadth depends on the ______.
II. forecast intervals
III. magnitude of the difference between expected and realized active returns
IV. correlations among the securities
I. number of securities considered
II. forecast intervals
III. magnitude of the difference between expected and realized active returns
IV. correlations among the securities
Correct Answer: I, II, and IV
The breadth is the number of independent investment options that are available to an asset manager every year.
User Contributed Comments 2
| User | Comment |
|---|---|
| davidt87 | then why tf would it have to do with correlation among securities? this section is pissing me off |
| davidt87 | last reading explains that the active returns must be uncorrelated for the breadth to equal the number of assets - still don't like this section tho |