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Exam CWM_LEVEL_2 All Questions
Exam CWM_LEVEL_2 All Questions

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AAFM Chartered Wealth Manager CWM_LEVEL_2 Question # 301 Topic 32 Discussion

CWM_LEVEL_2 Exam Topic 32 Question 301 Discussion:
Question #: 301
Topic #: 32

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


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