Just when I thought growth vs value questions would be easy point. How are they determining the answer to question #21. Are you supposed to look at Fund GB1 on it’s own and know whether the amount of the P/E would make it value or growth? Or are you supposed to compare it relatively to say the SGX or STI? I fear there is not an answer out there.
thepinkman Wrote: ------------------------------------------------------- > Just when I thought growth vs value questions > would be easy point. How are they determining the > answer to question #21. > > Are you supposed to look at Fund GB1 on it’s own > and know whether the amount of the P/E would make > it value or growth? Or are you supposed to compare > it relatively to say the SGX or STI? > > I fear there is not an answer out there. Yo, give us the specific question typed out or let us know which mock you’re referring to!
Being compliant with CFAI standards, thepinkman means CFAI Mock 2011.
2011 Mock Exam #21. Wait there are other mocks out there besides the 2011? I thought they were just recycling the same questions.
Just remembered… no one answered my question. Come on lurkers…now’s your chance to shine!
i got this question wrong and dont have it in front of me, but I remember thinking that since it showed similarities to the index with the top 30 funds it should be value since only value companies would be in the top 30. i dont know what I was thinking. I think the bottom line was that a few of the PE ratios and dividend yield gave conflicting views. you are supposed to make a relative comparison to the index. lower PEs are value higher growth is growth. this one had both so market oriented. sorry thats best I can do without it in front. at least you get a bump a lump
I agree - this is so ticky tacky - with a growth rate of 11%, P/B of 2.1 and PE of 21 how can this not be a growth style?
although after re-reading the question, it says that the STI index is a value weighted index, so compared to that it looks more like a value than a growth style… i know i am not answering your question but i can see why there is so much confusion regarding this
The fund should be compared to the general index. I got this one wrong because there were 2 indexes given which confused me.
21 is clearly C …in order to determine investment style you have to compare with index
Compare to index. Value weighted index is another name for capitalization weighted index not the style unfortunately.
even in a simple concept like this they find a damn way to make it debatable.you dont know which index to choose to compare…wtf pinkman btw there are 2009 and 2010 mocks,dont you have them??
The answer given was that the valuation ratios ( P/E , P/B) are very similar to the index which is obviously a market index. Since there is no value tilt or growth tilt , it resembles a market-oriented style more than anything else. I got this one right but for the wrong reason. I didn’t even look at the valuation ratios for the index, I was in such a hurry , I just scanned left to right and decided it didn’t look valuey or growthy so must be market - oriented.
superstar123 Wrote: ------------------------------------------------------- > even in a simple concept like this they find a > damn way to make it debatable.you dont know which > index to choose to compare…wtf > > pinkman btw there are 2009 and 2010 mocks,dont you > have them?? No. Sorry if this starts a chain reaction of lurkers but could you send it to my alias at peter.rooney94@gmail.com? Thanks.
BUMP. The general consensus is to compare fund GB1 to the SGX index. However one of the answers descriptions says the funds leans slightly towards a growth style because of it’s dividend yield. GB1 dividend yield 1.5% and the index is .8%. Wouldn’t having a higher dividend yield make it more valuey? Just about to let this question go and move on with my life.
When it is compared to the overall broad market index, it looks like a Value style. However, when compared to the index of the large market cap index (which itself is a broad market based index, just with a focus on the largest market cap stocks), it is extremely similar in all respects to that index. Because of this, the most precise style of this index would be a “large market cap, market oriented” style. So, the answer is market oriented. Fairly straight forward question.
little question caused too much loss hair… I think SGX is the best proxy for “market” and any “market orientation” should be against the “market” portfolio. The STI on the other hand is a much narrower index of just 30 *largest* firms from SGX!! STI by definition is a *large cap* index.
OK I just took the mock… When you’re determining whether a portfolio is growth/value/market-oriented, you need to compare it to the relevant benchmark. In this case, the paragraph stated that the two mutual funds were made up of stocks that are a part of the STI index, so it’s a much more relevant comparison than the SGX, which would contain a lot of midcap and smallcap stocks.