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Basic Question 6 of 10
Which is NOT one of two principals that results from the focus on SAA in portfolio construction?
B. The returns to groups of similar assets predictably reflect exposures to certain sets of systematic factors.
C. Empirical studies have shown that 85-95% of a portfolio's total returns come from the asset allocation decision.
A. A portfolio's systematic risk accounts for most of its change in value over the long term.
B. The returns to groups of similar assets predictably reflect exposures to certain sets of systematic factors.
C. Empirical studies have shown that 85-95% of a portfolio's total returns come from the asset allocation decision.
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Edward Liu
Learning Outcome Statements
explain the specification of asset classes in relation to asset allocation
describe the principles of portfolio construction and the role of asset allocation in relation to the IPS
CFA® 2025 Level I Curriculum, Volume 6, Module 4.