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LOS i: Compare and contrast the major types of currency management strategies specified in investment policy statements.
Q1. In the management of currency exposure, the one approach that would most likely explicitly include a benchmark for returns on currency positions would be associated with:
A) a separate asset allocation approach.
B) an overlay approach.
C) a balanced mandate approach.
Q2. Rob Johnson, CFA, manages a large portfolio of international assets for a client. He and the client had agreed upon a well-defined IPS, which specified that an outside expert would manage the currency risk as part of the overall portfolio strategy. Recently Johnson and the client changed the IPS so that the expert manages currency positions using a strategy distinct from the security portfolio and distinct benchmarks. The move that Johnson and the client have agreed upon would be best described as moving from:
A) a separate asset allocation approach to an overlay approach.
B) a balanced mandate approach to a currency overlay approach.
C) an overlay approach to a separate asset allocation approach.
Q3. Jill Pope, CFA, manages a large portfolio of international assets for a client. She and the client had agreed upon a well-defined IPS, which specified that Pope was responsible for managing currency exposure as one of the risks of the portfolio. Recently Pope and the client changed the IPS so that they now have hired a separate manager, who is an expert in currency risk, and that manager will be responsible for currency risk. The move that Pope and the client have agreed upon would be best described as moving from:
A) an overlay approach to a balanced mandate approach.
B) a balanced mandate approach to a currency overlay approach.
C) an overlay approach to a separate asset allocation approach. | 
发表于 2009-4-8 10:06
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