CFA Practice Question

There are 136 practice questions for this study session.

CFA Practice Question

Suppose the return on a managed portfolio was 10% last year. For the same period, the benchmark portfolio return was 12%, while the market portfolio return was 11%. What's the value added of the managed portfolio?

A. 0%
B. -1%
C. -2%
Correct Answer: C

Value added is defined as the difference between the return on the managed portfolio and the return on a passive benchmark portfolio. 10% - 12% = -2%

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thebkr777 Hope this is on the test
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