CFA Practice Question

There are 136 practice questions for this study session.

CFA Practice Question

Value added would be expected to be ______ before the fact.
A. positive
B. negative
C. either positive, negative or zero
Explanation: Active management is based on the mathematics and principles of risk and return from basic mean-variance portfolio theory, but with a focus on value added compared with a benchmark portfolio.

Value added might be positive or negative after the fact, but would be expected to be positive before the fact or active management would generally not be justified.

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