QUESTIONS 1, INCLUDING GUIDELINE ANSWER, 1996 (STUDY SESSION 9) B) REC...

6. - L3 MOCK SAMPLE EXAM CFA LEVEL III GUIDELINE ANSWERS 2001
L3 MOCK SAMPLE EXAM CFA LEVEL III GUIDELINE ANSWERS 2001
6. Managing Investment Portfolios: A Dynamic Process, 2

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edition, John L. Maginn and Donald L. Tuttle, eds. (Warren, Gorham & Lamont, 1990) A. “Asset Allocation,” Ch. 7, pp. 7-1 through 7-27, William F. Sharpe B. “Monitoring and Rebalancing the Portfolio,” Ch. 13, Robert D. Arnott and Robert M. Lovell, Jr. Purpose: To test the candidate’s ability to evaluate and adapt investment strategy to the changing needs of an individual investor. LOS: The candidate should be able to “Individual Investors” (Study Session 9) c) analyze the objectives and constraints of an individual investor and use this information to formulate an appropriate investment policy by taking into consideration the investor’s psychological characteristics, position in the life cycle, long-term goals, liquidity constraints, and any special circumstances such as taxes, gifts, and estate planning; d) create an asset allocation policy for an individual investor that is based on a multi-asset, total return approach. Cases in Portfolio Management (Study Session 9) c) create an investment policy statement for the individual investor in each case, using the concepts addressed in the readings in this Study Session; d) recommend and justify an asset allocation that would be appropriate for an individual investor.