Topic Test Fixed Income - Berg #6

CFA Level III Fixed Income
#1

Hi.

I did topic test: Fixed Income - Berg and did not get question #6 even after reading the explanations.

Question quote:

[question removed by moderator]

I have no idea what that means. Also, why can Criterion 3 be accurate? I thought that you need to add port. manager with highest alphas first and then correlation comes in.

Anybody got this?

Thanks. - Tokyo

#2

you want one manager’s area of alpha to be separate from another managers - so that with different economic conditions, you are insured and you may get an alpha under each situation.

  1. is wrong - esp because you see " consistently outperform over time"
#3

Hi cpk123,

Thanks for taking a look into this. I somehow misread that Criterion 2 was not that strong a statement. Now I got that Criterion 2 is wrong. Thanks for your help!

#4

Questions for Criteria 1: I thought “active return” = Rp-RBenchmark, and style = RBenchmark - Rbroad index. Why would “style analysis” identify “active risks”?