CFA CFA Level 1 CFA Level 1 Question of the Week – Equity Investements

CFA Level 1 Question of the Week – Equity Investements

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    • Avatar of lugnutslugnuts
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        What’s the answer @Matt_AnalystPrep

      • Avatar of Matt_AnalystPrepMatt_AnalystPrep
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          The correct answer is A.

          The fixed-income universe is quite wide: There are securities issued by public-owned corporations, governments, government agencies, and even private firms. Each of these entities issues a variety of fixed-income securities with different characteristics. Therefore, the number of fixed-income securities is many times larger than the number of equity securities.

          To accurately represent a specific fixed-income segment, an index usually includes thousands of different securities. What’s more, all these fixed-income securities mature at some point, and issuers replace them with new ones. Thus, the turnover in fixed-income indices is quite high, and developers have to constantly update the index structure.

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