- CFA Exams
- CFA Level I Exam
- Study Session 17. Alternative Investments
- Reading 50. Introduction to Alternative Investments
- Subject 1. Alternative investments
CFA Practice Question
The volatility of returns to alternative investments' and correlation of their returns with the returns to traditional investments tend to be:
B. estimated correctly.
C. overestimated.
A. underestimated.
B. estimated correctly.
C. overestimated.
Correct Answer: A
This is because estimated values rather than actual market prices are usually used to be reported to index providers.
User Contributed Comments 5
User | Comment |
---|---|
vatsal92 | Low (underestimated) correlation with traditional investments. |
GBolt93 | believe it's saying the opposite. Generally correlation is actually higher than expected, hence underestimated. |
akbhagat96 | Can someone please help me to explain the answer |
Olesya_CFA | @akbhagat96 look at the second response. It makes sense to me. |
Logaritmus | Investment in Bitcoin is not risky? Isn't it? |