标题: Reading 31: Equity Portfolio Management－LOS u [打印本页]
作者: tycoon 时间: 2008-9-16 10:56 标题: [2008] Session 10－Reading 31: Equity Portfolio Management－LOS u
CFA Institute Area 8-11, 13: Asset Valuation
Session 10: Equity Portfolio Management
Reading 31: Equity Portfolio Management
LOS u: Review the process of identifying, selecting, and contracting with equity managers, including the development of a universe of suitable candidates based on both qualitative and quantitative factors, the composition of equity manager questionnaires, and the analysis of fee structures.
作者: tycoon 时间: 2008-9-16 10:57
Which of the following provisions in an equity managers compensation plan would create symmetry in the compensation?
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B) | A high water mark provision. |
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Answer and Explanation
Symmetry refers to when the manager receives both rewards for good performance and punishment for bad performance. A high water mark provision states that a manager must compensate for past underperformance before receiving a performance-based fee. This is the only compensation provision mentioned in the responses that punishes for bad performance so it is the only one that provides symmetry.
作者: tycoon 时间: 2008-9-16 10:58
If an investor is concerned that his or her equity manager might undertake too much risk, which of the following provisions in the equity managers compensation plan should be included?
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| B) | A high water mark provision. |
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Answer and Explanation
A performance-based fee may include a fee cap where a maximum is placed on the performance fee. The intent is to prevent managers from undertaking too much risk to earn higher fees.
作者: tycoon 时间: 2008-9-16 10:58
Which of the following equity manager compensation plans would create the greatest incentive for performance?
| A) | A base compensation plus bonus and stock options. |
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| B) | A base compensation plus stock options. |
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D) | A symmetric compensation plan. |
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Answer and Explanation
Performance-based fees align the interests of the equity manager and the investor, especially if they are symmetric. A symmetric compensation plan has both rewards for good performance and punishment for bad performance. The other responses do not punish the manager for bad performance.
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