AAFM Chartered Wealth Manager (CWM) Certification Level II Examination CWM_LEVEL_2 Question # 325 Topic 33 Discussion

AAFM Chartered Wealth Manager (CWM) Certification Level II Examination CWM_LEVEL_2 Question # 325 Topic 33 Discussion

CWM_LEVEL_2 Exam Topic 33 Question 325 Discussion:
Question #: 325
Topic #: 33

Section B (2 Mark)

Consider the single factor APT. Portfolio A has a beta of 0.2 and an expected return of 13%. Portfolio B has a beta of 0.4 and an expected return of 15%. The risk-free rate of return is 10%. If you wanted to take advantage of an arbitrage opportunity, you should take a short position in portfolio _________ and a long position in portfolio _________.


A.

A, A


B.

A, B


C.

B, A


D.

B, B


Get Premium CWM_LEVEL_2 Questions

Contribute your Thoughts:


Chosen Answer:
This is a voting comment (?). It is better to Upvote an existing comment if you don't have anything to add.