Successful timing of a portfolio’s exposure to rewarded factors would be a source of: A. alpha. B. alternative beta. C. idiosyncratic risk.

The correct answer is Option A. With exposures to rewarded factors increasingly accessible via rule-based indexes, simple static exposure to known rewarded factors is no longer widely considered a source of alpha. However, successfully timing that exposure would be a source of alpha.

A CFA Level 3 Discussion About Question Of The Week: Level 3

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This topic has 1 reply, 1 voice, and was last updated Apr-206:34 pm by MarkMeldrum.

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- MarkMeldrum
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  24 Apr 2020 at 6:44 am
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  Successful timing of a portfolio’s exposure to rewarded factors would be a source of:
  - A. alpha.
  - B. alternative beta.
  - C. idiosyncratic risk.
- MarkMeldrum
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  - Undecided
  27 Apr 2020 at 6:34 pm
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  The correct answer is Option A.
  
  With exposures to rewarded factors increasingly accessible via rule-based indexes, simple static exposure to known rewarded factors is no longer widely considered a source of alpha. However, successfully timing that exposure would be a source of alpha.
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