Preview Questions Portfolio Manager | Role Specific Skill

Question 1: Which of the following is the most accurate method to assess diversification within a BFSI portfolio?

Which action should you take?

Choose only one option

Risk-adjusted return metrics (e.g., Sharpe ratio)

Correlation matrix between asset classes

Use of the capital asset pricing model (CAPM)

Historical volatility of each asset

Question 2: During a period of rapid economic expansion, what sectoral shifts should a BFSI portfolio manager consider to optimize portfolio performance?

Which action should you take?

Choose only one option

Focus exclusively on energy and commodity sectors

Reduce exposure to equities and increase cash holdings

Increase exposure to financial stocks and consumer discretionary stocks

Allocate more towards safe-haven assets like government bonds

Question 3: What is the main purpose of the efficient frontier in asset allocation?

Which action should you take?

Choose only one option

To evaluate which assets are best for short-term investment in a volatile market

To determine the minimum risk level for a portfolio without regard to return expectations

To identify the optimal portfolio that offers the highest expected return for a given level of risk

To assess the most liquid assets for immediate portfolio needs

Question 4: Which of the following is the most effective way to onboard a new client in portfolio management?

Which action should you take?

Choose only one option

Provide a thorough onboarding process that includes understanding their goals, risk tolerance, and preferences

Focus only on returns and performance projections

Jump directly into portfolio construction without discussing the client's background

Offer standardized portfolio solutions without customization

Question 5: How do market liquidity conditions affect portfolio performance in the BFSI sector, and how can a portfolio manager respond effectively?

Which action should you take?

Choose only one option

Liquidity fluctuations only affect small-cap stocks

Liquidity conditions do not significantly impact portfolio performance

Liquidity improves, making risk-free assets more attractive

Liquidity risk increases, leading to higher volatility; diversification is key

Question 6: When analyzing macroeconomic data, what is the most critical factor in predicting future market performance?

Which action should you take?

Choose only one option

Government fiscal policy

Inflation trends and central bank policy

The consumer price index

Unemployment data