Active Portfolio Management
Free CFA Level II lesson in Portfolio Management. 13 min read, ~1,938 words.
IR = active return / tracking error measures active return per unit of active risk and is the primary metric for evaluating active managers. IR = IC x sqrt(BR) x TC: the fundamental law of active management, with three levers (forecast quality, independent decisions, constraint efficiency). The square root on...
Read the full lesson, free →
Worked examples and practice. Free with a free account, no card.
What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- active portfolio management
Browse all free CFA Level II lessons or jump into free CFA Level II practice questions.