when the question asks to state the return objective, or prepare and justify an IPS (and for the return objective part), do you calculate the actual return required, or do you just put in descriptive form, i.e.
“To achieve its objectives, the Family Portfolio must provide for after-tax distributions equal to the difference between the Smiths’ expenses and their fixed income payments. To maintain its real value, the portfolio must also grow at a rate that offsets inflation’s impact on the Smiths’ total expenses, including those currently covered by the fixed pension and Gift Fund payments.”
or do you read further down the follow up questions to see if there is subsequent follow up that asks to compute or calculate? Or do you compute a return requirement regardless?
The ones i’ve remembered were generally describe/state and then calculate all in the same question. I then just bullet point what goals they have and then calculate it…if it is two points it is probably just state and the next question would be calculate which i may have done from a 3rd party prep
If it says “State” the return (risk) objective, write a concluding (prefacing) sentence “The required Rate of return Return (Risk Tolerance) for the portfolio is x”. For risk, support with factual info from case (bullets are fine as long there complete thoughts). I’ve been told this has become an issue in last couple years, taking points for not “stating” the objective. A circled number or “above average” is not a statement. I’ve gotten into habit of just writing a sentence for all these types of questions.
If it’s a compare, then still calculate and compare to the return given. See 1A 2016. Usually, if no calculations are required, it will say so. Determine, justify, all implicitly assume calculations. Once complete, follows format above regarding “State”, even if not in question. Remember this is an IP “Statement”.