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Basic Question 5 of 5
The volatility of returns to alternative investments' and correlation of their returns with the returns to traditional investments tend to be:
B. estimated correctly.
C. overestimated.
A. underestimated.
B. estimated correctly.
C. overestimated.
User Contributed Comments 6
| 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? |
| allenwang | Is it higher or lower correlation with traditional investments? |
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Learning Outcome Statements
describe features and categories of alternative investments
CFA® 2025 Level I Curriculum, Volume 5, Module 1.