- CFA Exams
- CFA Level I Exam
- Study Session 17. Portfolio Management (2)
- Reading 47. Analysis of Active Portfolio Management
- Subject 2. Comparing Risk and Return
CFA Practice Question
Two active managers, A and B, have IRs of 0.7 and 0.8, respectively. Which manager has more opportunities?
A. Manager A
B. Manager B
C. This cannot be determined.
Explanation: Manager B has a higher IR, which indicates more opportunities.
User Contributed Comments 4
| User | Comment |
|---|---|
| alejandroc | But opportunities are measured by breadth; how do we know if one has more opps? Theoretically a manager could have a higher IC (predictive capability) but lower opportunities. Am I wrong? |
| janis36 | What do we mean by "opportunities"? |
| dimitris13 | I thought exactly the same thing but I am not certain we are right |
| yanoshi | What if manager B has a lower breadth but a higher IC or TC? |