CFA CFA Level 3 Question of the Week: Level 3 – Fixed Income

Question of the Week: Level 3 – Fixed Income

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    • MarkMeldrum
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      Which total-return mandate approach seeks to generate active returns of between 20 to 30 bps/year?

      • A. Pure indexing.
      • B. Enhanced indexing.
      • C. Active Management.
    • MarkMeldrum
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      The correct answer is Option B.

      Enhanced indexing seeks modest (20-30 bps) outperformance of the benchmark while active risk is kept low.  Active management seeks outperformance greater than 50 bps per year.

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