IMANET CMA Exam - Topic 2 Question 83 Discussion

Actual exam question for IMANET's CMA exam

Question #: 83
Topic #: 2

A feasible portfolio that offers the highest expected return for a given risk or the least risk for a given expected return is a (n)

AOptimal portfolio

BDesirable portfolio

CEfficient portfolio

DEffective portfolio

Show Suggested Answer

Suggested Answer: B

If the 8% return exactly equals the present value of the future flows ., NPV is zero), then simply determine the present value of the future inflows. Thus, Hopkins Company's initial cash outlay is $19,090 [($2,500)(PVIFA at 8% for 10 periods) + ($5J00)(PVlF at 8% for 10 periods ($2,500)(6.710) + ($5,000)(.463)].

by Alline at Mar 21, 2024, 12:57 PM

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Georgene

6 months ago

Totally agree, efficient portfolio is the way to go!

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Gertude

6 months ago

Wait, are we sure about that? Sounds off.

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Salina

6 months ago

Efficient portfolio is the right term here.

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Golda

7 months ago

I thought it was the optimal portfolio?

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Shizue

7 months ago

It's definitely the efficient portfolio!

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Gilma

7 months ago

I’m leaning towards "Efficient portfolio" since it relates to the risk-return trade-off we discussed. But I could be mixing it up with "Optimal."

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Freeman

7 months ago

I feel like "Optimal portfolio" sounds right, but I also recall something about efficiency in portfolios. Maybe it's a trick question?

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Delisa

7 months ago

I remember practicing a question similar to this, and I think it was about optimal portfolios. But now I'm confused if that's the same as efficient.

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Kanisha

8 months ago

I think the answer might be "Efficient portfolio," but I'm not entirely sure. We talked about it in class, and it seems to fit the definition.

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Keneth

8 months ago

Ah, I see what they're getting at now. The key is finding the portfolio that maximizes the risk-return tradeoff. That would be the efficient portfolio, so I'm going to go with option C.

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Zita

8 months ago

Okay, let me walk through this step-by-step. We're looking for the portfolio that offers the highest expected return for a given risk level, or the least risk for a given expected return. That sounds like the definition of an efficient portfolio to me. I'll go with C.

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Micah

8 months ago

Hmm, I'm not totally sure about this one. I know it has something to do with portfolio optimization, but I'm a bit fuzzy on the exact terminology. I'll have to think this through carefully.

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Merilyn

8 months ago

This question seems straightforward - I think the answer is C, efficient portfolio. That's the term we've been learning about in class for the optimal risk-return tradeoff.

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Alayna

8 months ago

Hmm, this is a tricky one. I'm not totally sure which metric is considered the most important. I'll have to think through the different options carefully.

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