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AAFM GLO_CWM_LVL_1 Exam - Topic 8 Question 116 Discussion

Actual exam question for AAFM's GLO_CWM_LVL_1 exam

Question #: 116
Topic #: 8

[All GLO_CWM_LVL_1 Questions]

If an investor's excess return is negative,

Athe realized return was less than the return earned by the market

Bthe required return exceeded the realized return

Cthe investor constructed a poorly diversified portfolio

Dthe investor's portfolio had excessive diversification

Show Suggested Answer

Suggested Answer: B

by Anjelica at Apr 12, 2026, 09:03 PM

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Thaddeus

1 month ago

I think B) makes sense too.

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Adela

1 month ago

A) is definitely true.

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Tricia

2 months ago

D seems off to me; I thought excessive diversification usually reduces risk. I lean towards A or B, but I'm not completely sure.

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Sena

2 months ago

I recall discussing diversification, but I can't remember if excessive diversification leads to negative excess returns. C seems plausible, but I'm not confident.

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Lindsey

2 months ago

I'm not entirely sure, but I remember something about required returns. Maybe B is the answer since it sounds familiar from practice questions.

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Taryn

2 months ago

I think if the excess return is negative, it might mean the realized return was less than the market return, so A could be right.

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