CFA Practice Question

There are 139 practice questions for this study session.

CFA Practice Question

The volatility of returns to alternative investments' and correlation of their returns with the returns to traditional investments tend to be:

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?
You need to log in first to add your comment.