CFA Practice Question

There are 119 practice questions for this study session.

CFA Practice Question

Which statement is true?
A. Gross position risk is an important risk measure for understanding the importance of correlation risk for a hedge fund portfolio.
B. Hedge funds usually use a benchmark-relative measure.
C. Standard deviation and historical beta measures can be very helpful for hedge fund strategies that focus on events.
Explanation: B is false. They rarely use such a measure.

C is false too. These measures can be misleading. Instead, "maximum drawdown" can be used to understand more extreme risks.

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