PM MODULE 86

Question 1

86.1 What are the components of the IPS? (FIRST FOUR)

Answer 1

What three things should we keep in mind?

Question 2

86.1 What are the components of the IPS? (LAST FIVE)

Answer 2

Question 3

86.1 What is the difference between absolute and relative risk objectives?

Answer 3

absolute = standalone measure ($ amount of %)

relative = measure with a comparison to some sort of benchmark (performance vs benchmark)

Question 4

86.1 What is the difference between the ability to bear risk and the willingness to bear risk?

Answer 4

ability = depends on the clients financial circumstances - how much emergency assets do they have eg - how much time do they have? - what are their job prospects?

willingness = attitudes, beliefs (biases)

Question 5

86.1 Describe the chart or ability / willingness to take risk (and what the below and above average realisations of these characteristics mean)

Answer 5

resolution - need a discussion with the manager

Question 6

86.1

Question 7

86.1 Name some investment constraints?

Answer 7

Question 8

86.1 What are different asset allocation decision methods?

Answer 8

SAA + TAA = core-satellite

Question 9

86.1 What is the SAA process?

Answer 9

combining expectations and constraints

Question 10

86.1 Where do you find the rules about the rebalancing of an SAA/portoflio?

Answer 10

In the appendix of the IPS

Question 11

86.1 How does the core and satellite mix work?

Answer 11

Satellite is play money (TAA)

Question 12

86.1 What are some approaches to ESG investing?

Answer 12