CFA Practice Question

There are 136 practice questions for this study session.

CFA Practice Question

You have five individual securities to choose from to construct your portfolio. Their active returns are uncorrelated with each other. You can rebalance your portfolio twice a year. What is the breadth of your forecasts?

A. 5
B. 10
C. 25
Correct Answer: B

The breadth is the number of independent decisions made per year by an investor in constructing his/her portfolio. In this case, 2 x 5 = 10.

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