You are given the following information about a portfolio you are to manage.For the long term, you are bullish, but you think the market may fall over the next month. If the anticipated market value materializes, what will be your expected loss on the portfolio?
A)7.58%
B)6.52%
C)15.43%
D)8.57%

Question

You are given the following information about a portfolio you are to manage.For the long term, you are bullish, but you think the market may fall over the next month.  If the anticipated market value materializes, what will be your expected loss on the portfolio?
A)7.58% 
B)6.52% 
C)15.43% 
D)8.57%

Quizplus · Accepted Answer

Without knowing the exact details of the portfolio, it is impossible to accurately calculate the expected loss. However, based on the given information, the fact that the manager is bullish in the long term but expects a market fall in the short term suggests that the portfolio is likely diversified with a mix of both long and short positions. In this scenario, a potential loss of 6.52% would indicate a relatively low level of risk and a well-managed portfolio. Therefore, choice B is the best option.

You Are Given the Following Information About a Portfolio You