Overview on Portfolio Management

Overview on Portfolio Management

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Question 1 of 6

1. Question
Portfolio Approach to Investing

A portfolio has 3 assets in equal weights. In the past year, the the standard deviations of the 3 assets are 6%, 10%, and 20%. The portfolio as a whole has a standard deviation of 9%. What is the diversification ratio of the portfolio?
- 0.75
- 0.84
- 1.33
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Question 2 of 6

2. Question
Types of Investors

Which of the following is LEAST accurate of defined benefit pension plans?
- Employer is required to ensure that the employee receives the promised future benefits
- Employer makes a contribution every month based on the employee's years of service and salary
- The employer assumes the risk of the investment decisions
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Question 3 of 6

3. Question
Types of Investors

Which of the following types of investors is likely to have the LOWEST liquidity needs?
- Endowments
- Insurance companies
- Mutual funds
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Question 4 of 6

4. Question
Steps in the Portfolio Management Process

Which of the following steps is LEAST likely to be in the execution stage in the portfolio management process?
- Determining the target asset allocation of the portfolio
- Identifying attractive securities to be included in the portfolio
- Portfolio rebalancing
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Question 5 of 6

5. Question
Pooled Investments

Which of the following pooled investment is likely to have the LARGEST discrepancy between its market price and its NAV?
- Open-end Mutual Funds
- Closed-end Mutual funds
- Exchange-Traded Funds
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Question 6 of 6

6. Question
Pooled Investments

Which of the following is the distinguishing feature of a leveraged buyout fund (PE fund)?
- It takes an active role in the management of the portfolio companies
- It buys entire public companies and take them private using debt
- The strategy is to ext the companies at higher valuation
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Welcome to PrepNuggets

Hey Future CFA Charterholder,

Many years ago, I was exactly where you are today—a CFA Level I candidate juggling a demanding full-time career with the daunting CFA curriculum. Coming from a Computer Engineering background, finance was entirely new territory for me. And yes, it was tough!

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About the Author

PrepNuggets

Keith is the founder and chief instructor of PrepNuggets. He has a wide range of interests in all things related to tech, from web development to e-learning, gadgets to apps. Keith loves exploring different cultures and the untouched gems around the world. He currently lives in Singapore but frequently travels to share his knowledge and expertise with others.

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