honeycfa

Investor objectives relate to which of the following? Evaluating:

A) capital market and security factors.

B) asset allocation and security factors.

C) risk and return factors.

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Investor objectives relate directly to the risk and return factors acceptable to the investor. Risk factors are associated with how much risk the investor can tolerate. Return factors relate to required and desired returns.

honeycfa

Which of the following is not typically included in an investment policy statement?

A) Identification of duties.

B) A client description.

C) Names of specific managers or mutual funds that should be used.

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General statements about how funds should be invested are included in the investment policy statements. It would not be wise to include specific manager/mutual funds, as the people involved in managing money change over time. Instead, asset allocation objectives should be used.

honeycfa

The objective of achieving a 10% annual rate of return is an example of a(n):

A) required return objective.

B) absolute risk objective.

C) relative return objective.

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The objective of earning a 10% return is a required return objective because it represents some level of return that must be acheived by the portfolio.