I have a mental block when two different answers require me to repeat the same information. I feel like that’s somehow cheating on the exam
So, would like to confirm - is it OK to repeat the return requirement for the first year’s spending as a liquidity constraint as well? Clearly you can’t tie up that money in stocks or PE.
Unrelated question, how far does the liquidity requirement go? If someone needs 25% of the portfolio in year 5, is that a liquidity constraint or not?
Part 1 - The calc is done in the return section. The note is made in the liquidity section e.g. 10k needed in Yr 1 for x. No need to repeat the calc or say the outcome of the calc in the liquidity section
Part 2 - a liquidity restraint after year one would go in the “unique circumstances” section
It is said that return question typically asking you to state first year requirement.
Unless the question specifically ask not to use reason you used before, I don’t think it is a problem to use same arguement to answer different questions. (calculated or not)
The first few I did I was repeating stuff and running out of room and burning time. Since then I have done a lot of practice questions on IPS and that is how they typically structure the answers.
Questions typically ask specifcally for the calc in the return section but just comments in the constraints.
The way many questions are structured there are a lot of opportunities for overlap in the constraints section. It is not unusual to have to note the finding of some other section but don’t redo the whole explanation or calc again, just give a dot point of the finding.