n NISM Certifications
X NISM Series X
Medium

Which statement accurately describes performance attribution analysis?

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    It decides the performance fee charged by the fund manager

  2. It assesses whether a portfolio outperformed the benchmark in risk-return terms

    Correct answer

  3. C

    It predicts future returns based on past performance

  4. D

    It is unrelated to risk and return analysis

Why this is the answer

Performance attribution analyzes the sources of returns, comparing risk-adjusted performance to benchmarks to determine skill or luck.

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