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Basic Question 4 of 14

Factor portfolios are useful for ______.

A. speculation purposes only
B. hedging purposes only
C. both speculation and hedging purposes

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I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt

Martin Rockenfeldt

Learning Outcome Statements

explain sources of active risk and interpret tracking risk and the information ratio;

describe uses of multifactor models and interpret the output of analyses based on multifactor models;

describe the potential benefits for investors in considering multiple risk dimensions when modeling asset returns.

CFA® 2025 Level II Curriculum, Volume 5, Module 40.