thommo77

jem Wrote:
-------------------------------------------------------
> darlia Wrote:
> --------------------------------------------------
> -----
>
> >
> > ALWAYS go with the lower of willingness and
> > ability. Even if ability is above average and
> > willingness is below average, the risk is below
> > average.
>
> Use to think the same too, that is take the lower
> of the two. But in the CFA text, there are
> situations when that it not so, but rather an
> 'average' of ability and willingness is taken as
> the overall risk tolerance. See the Inger family
> case study on page 128 of Book 2. Ability is
> 'above average', willingness is 'below average'
> and overall risk tolerance is 'average'.


Schweser also says this in Pratice Exams vol. 2. If ability is above-average and willingness below-average then you can average the two instead of taking the minimum.

This is another one of the very confusing contradictions in the curriculum.