CFA Practice Question

There are 136 practice questions for this study session.

CFA Practice Question

Consider the following benchmark and managed portfolio.

What is the value added for the managed portfolio?

A. 0.45%
B. 0.65%
C. 2.45%
Correct Answer: C

The return on the benchmark: 0.70 x 12% + 0.3 x 3% = 9.3%
The return on the managed portfolio: 0.75 x 15% + 0.25 x 2% = 11.75%
Active return =11.75% - 9.3% = 2.45%

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