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CFA Level 1
Portfolio Management

Understanding Performance Attribution

Very Easy Performance Evaluation Performance Attribution

In the context of portfolio management, performance attribution is used to analyze how a portfolio's returns can be attributed to various factors. It helps in understanding the sources of a portfolio's performance, such as market selection and asset allocation decisions. A portfolio manager is evaluating their portfolio and wants to determine if their investment decisions have contributed positively or negatively to the overall performance.

Which of the following best describes performance attribution?

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