- CFA Exams
- CFA Level I Exam
- Study Session 17. Portfolio Management (2)
- Reading 47. Analysis of Active Portfolio Management
- Subject 4. Applications of the Fundamental Law
CFA Practice Question
Here is information about the Long-Short Global Equity Fund:
What is the expected active return, based on the fundamental law of active management?
A. 0.45%
B. 0.97%
C. 1.98%
Explanation: TC x IC x BR1/2σA = 0.982 x 0.095 x 271/2 x 2.00% = 0.97%
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