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Basic Question 11 of 14

Multi-factor models are useful in ______.

I. passive management
II. active management

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I used your notes and passed ... highly recommended!
Lauren

Lauren

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.