Portfolio Management Query deepak

deepakkrkanodia
Finance Junkie
Posts: 49
Joined: Thu Aug 09, 2012 4:45 pm

Portfolio Management Query deepak

Postby deepakkrkanodia » Sat Nov 10, 2012 3:05 pm

Question 1: When assessing the performance of a single investment fund, the asset allocation decision explains:

A. a little less than 100% of the level of a fund’s returns.
B. about 90% of the fund’s variation in returns across time.
C. an average of 40% of the variation in returns of a fund across time.

Query:
Plz explain this question in simple terms and why answer B is correct



Question 2:

What is meant by " Investors have homogeneous expectations in CAPM theory, but not in Markowitz modern portfolio theory"
plz elaborate in simple terms for both theories

Tags:

pankaj
Finance Junkie
Posts: 61
Joined: Fri Aug 03, 2012 11:24 am

Re: Portfolio Management Query deepak

Postby pankaj » Sat Nov 17, 2012 4:55 pm

option B is the correct, it was observed in the past. for CFA exam mug it up.

I guess LOS related to other query has been removed from the 2012 syllabus.

deepakkrkanodia
Finance Junkie
Posts: 49
Joined: Thu Aug 09, 2012 4:45 pm

Re: Portfolio Management Query deepak

Postby deepakkrkanodia » Sun Nov 18, 2012 12:39 am

pankaj

sorry to say, but i am not giving cfa exam for mugging up, just want to understand it, if you could explain

regards

deepak

pankaj
Finance Junkie
Posts: 61
Joined: Fri Aug 03, 2012 11:24 am

Re: Portfolio Management Query deepak

Postby pankaj » Tue Nov 20, 2012 10:07 am

Deepak, go through the curriculum, you will find a study which shows asset allocation decision explian about 90% of the fund’s variation in returns across time.


Return to “CFA Level I”



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