CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

Which statement is false?

I. In an efficient market, superior, risk-adjusting returns (net of all expenses) are not possible.
II. In a very inefficient market an active investment strategy is always preferable to a passive investment strategy.
Correct Answer: II

An active investment strategy MAY, but will not always, outperform a passive investment strategy on a risk-adjusted basis.

User Contributed Comments 4

User Comment
czar but isnt that in an efficient market only? Pls clarify
thekobe you have to put a lot of attention at the word "always"
johntan1979 What the heck with all these word plays... :(

Always, may, except...

As if the exam itself wasn't tough enough already
Inaganti6 I feel like half the CFA is about paying attention to semantics.
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