Browse CFA Level 2 Essentials

Chapter 9: Portfolio Construction, Risk Measurement, and Performance

Chapter 9: Portfolio Construction, Risk Measurement, and Performance explains the core concepts, key definitions, and practical implications you need for solid analysis. It highlights common pitfalls and the intuition behind the methods so the results are interpreted correctly.

In this section

  • Portfolio Risk and Return Measurement
    Portfolio Risk and Return Measurement (CFA Level 2): Covers Why Risk and Return Matters and Understanding Weighted Average Return with key formulas and practical examples. Includes exam-style practice questions with explanations.
  • Active Portfolio Management Strategies
    Active Portfolio Management Strategies (CFA Level 2): Covers Active vs. Passive Management and Introduction to the Information Ratio (IR) with key formulas and practical examples. Includes exam-style practice questions with explanations.
  • Performance Evaluation and Attribution
    Performance Evaluation and Attribution (CFA Level 2): Covers Understanding Performance Measurement, Attribution, and Appraisal and The Brinson Model: Allocation vs. Selection with key formulas and practical examples. Includes exam-style practice questions with explanations.
  • Risk Management and Asset Allocation
    Risk Management and Asset Allocation (CFA Level 2): Covers Strategic Asset Allocation: The Long-Term Blueprint and Tactical Asset Allocation: Short-Term Tweaks with key formulas and practical examples. Includes exam-style practice questions with explanations.
  • Multifactor Models and APT
    Multifactor Models and APT (CFA Level 2): Covers APT as an Alternative to CAPM and The Core Multifactor Equation with key formulas and practical examples. Includes exam-style practice questions with explanations.
  • Measuring and Managing Market Risk (VaR and Beyond)
    Measuring and Managing Market Risk (VaR and Beyond) (CFA Level 2): Covers The Concept of Value at Risk (VaR) and Major VaR Approaches with key formulas and practical examples. Includes exam-style practice questions with explanations.
  • Backtesting, Simulation, and Strategy Validation
    Backtesting, Simulation, and Strategy Validation (CFA Level 2): Covers Backtesting and Data Integrity and Cleaning with key formulas and practical examples. Includes exam-style practice questions with explanations.
  • Exchange-Traded Funds (ETFs) and Practical Applications
    Exchange-Traded Funds (ETFs) and Practical Applications (CFA Level 2): Covers Understanding the Creation/Redemption Mechanism and Role of Authorized Participants in Liquidity and Price Alignment with key formulas and examples. Includes exam-style practice questions with explanations.

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Chapter 8: Alternative Investment Analysis
Chapter 10: Ethical Standards, Professional Conduct, and Compliance