week 12

Question 1

The CFA’s investment management framework partitions the process into three stages

Answer 1

1. Planning
2. execution
3. feedback

Question 2

The CFA’s investment management framework partitions the invement management process into three stages

what is planning

Answer 2

defining the inputs required to make investment decisions

Question 3

The CFA’s investment management framework partitions the invement management process into three stages

what is execution

Answer 3

making asset allocation and security selection decisions and, by doing so, constructing the investment portfolio

Question 4

The CFA’s investment management framework partitions the invement management process into three stages

what is feedback

Answer 4

monitoring and, if necessary, subsequent revision of the portfoliong so, constructing the investment portfolio

Question 5

the investment management process begins by

Answer 5

with the investment manager assessing how much risk the investor will accept to pursue higher returns.

 This will differ markedly between investors; and,

 An investment manager will typically ascertain the return requirement and risk tolerance of an investor by asking them to complete a questionnaire

Question 6

constraints on investment

liquidity

Answer 6

how readily investmens can be converted into cash

• how likely are individual and institutional investors likely to dispose of assets at short notice?

Question 7

constraints on investment

investment horizon

Answer 7

how long the investor plans to hold the asset

Question 8

constraints on investment

other 3 constraints

Answer 8

Regulations

Tax Considerations

Unique Needs

Question 9

investment policy statement

Answer 9

provides a framework to assist in the development and implementation of an investment program