Level I · 2026 curriculum · 8–12% of the exam
Portfolio Management
Portfolio Management covers risk and return, diversification, the CAPM, investment policy statements, behavioural biases and an introduction to risk management.
Exam weight8–12%
≈ Questions in a 180-question exam20
What the questions cover
- Return and risk measures, utility and risk aversion
- Diversification, the efficient frontier and the capital market line
- Systematic risk, beta and the CAPM / security market line
- Performance measures: Sharpe, Treynor, M² and Jensen's alpha
- Investment policy statements, objectives and constraints
- Behavioural biases and the risk management framework
How to study it
- Match the performance measure to the situation: Sharpe for a whole portfolio, Treynor for a well-diversified one.
- Classify biases by type (cognitive or emotional) — questions often test the classification.
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