What to know
Identify the rule, formula, or decision criterion before reading the answer choices. CFA Level I distractors often use the right vocabulary with the wrong condition.
Portfolio Management
Portfolio Risk and Return practice questions
Portfolio Risk and Return is part of CFA Level I Portfolio Management. Portfolio Management questions connect risk and return, asset allocation, CAPM, IPS constraints, behavioral biases, performance, and risk management. Use this page to review the controlling ideas, then work through 2 questions with answer explanations and common traps.
Review the worked explanations before moving into adaptive practice. The app version can mix this topic with due reviews and weak related concepts.
Practice this topicHow to practice
Work each item under time pressure, then compare your reasoning with the step-by-step explanation and key takeaway.
Review signal
Missed questions should become scheduled reviews when the error comes from a concept gap, formula setup, or answer-choice trap.
Portfolio Management
Portfolio Risk and Return
A portfolio invests 60% in Asset A and 40% in Asset B. Expected returns are 11% and 7%, standard deviations are 18% and 12%, and correlation is 0.25. The portfolio expected return and standard deviation are closest to:
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Portfolio Risk and Return
A stock has correlation of 0.60 with the market, stock standard deviation of 24%, and market standard deviation of 16%. The stock beta is closest to:
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