CFA Practice Question

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CFA Practice Question

According to fiduciary duty standards set by ERISA, ______.

A. every individual investment must be suitable on its own
B. managers are expected to diversify to reduce risk of loss
C. pension fund managers act solely for the benefit of the plan sponsor
Correct Answer: B

User Contributed Comments 6

User Comment
danlan How about A?
gord Every individual investment may not be suitable on it's own but may be suitable in the context of the entire portfolio when considering diversification, correclation, etc...
wuyi ERISA: Employee Retirement Income Security Act
TammTamm A is not correct because it's not every investment on it's own, it's in reference to the entire portfolio.
bantoo Yuppppp!
raffrobb To Diversify is a recommended procedure for compliance, I think.
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