CFA Practice Question

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CFA Practice Question

Over time, the major source of investment return and risk can most likely be attributed to ______.
A. stock selection
B. asset allocation
C. risk management
Explanation: The asset allocation decision explains about 90% of a fund's returns over time. Across all funds, asset allocation explains an average of 40% of the variation in fund returns, and slightly more than 100% of the average fund's level of return.

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