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Basic Question 0 of 13
In the "Global Equity Strategy" example, the transfer coefficient, information coefficient, and breadth are assumed to be 0.982, 0.1, and 27.0, respectively. The United Kingdom is expected to have a strong outperformance (2.0) and its active return volatility is calculated as 5.8%. What is its expected active return?
B. 1.2%
C. 2.9%
A. 5.8%
B. 1.2%
C. 2.9%
User Contributed Comments 2
| User | Comment |
|---|---|
| davidt87 | why did they even give us that equation in the previous section? where is this equation coming from? |
| CFAJ | the "score" is basically how much it outperforms the outperform in proportion to the portfolio return? |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
describe and interpret the fundamental law of active portfolio management including its component terms - transfer coefficient, information coefficient, breadth, and active risk (aggressiveness);
CFA® 2025 Level II Curriculum, Volume 6, Module 38.