Q1. Joan Ball, CFA, is trustee for the portfolios of several high net worth individuals. She is considering the purchase of equity shares in ARGO Corp., a company that is currently facing allegations of financial mismanagement. Ball believes that the scandal will be forgiven by the market and that shares in ARGO will perform well in the long term. Which of the following statements is in accordance with the new Prudent Investor Rule? A) Ball should not consider the addition of any investment that would add incremental risk to the portfolio. B) Ball should not recommend an investment whose performance could be negatively impacted by fraud or negligence on the part of management. C) Ball should evaluate any potential investment with regards to how it will contribute to the risk and return of the overall portfolio.
Q2. Robert Jones, CFA, is the trustee for The Homestead Foundation, a charitable organization whose mission is to provide funding to construct affordable housing in economically disadvantaged neighborhoods across the U.S. In accordance with the new Prudent Investor Rule, a key factor that Jones should consider when making investment decisions for the portfolio is: A) to eliminate the Foundation’s assets’ exposure to investment risk through appropriate investment decisions. B) the Foundation’s irregular needs for liquidity when undertaking construction projects. C) avoiding strategies that interfere with legal list statutes, or fail to preserve the purchasing power of Foundation assets.
Q3. When investing and managing trust assets in accordance with the new Prudent Investor Rule, a trust manager should most likely consider which of the following key factors? A) The trust’s performance relative to the benchmark. B) The effects of inflation and deflation. C) The beneficiary’s knowledge of financial concepts.
| 
发表于 2009-1-8 11:36
| 
