I just don’t get the answer. Short term rates are used in a currency overlay approach but we are considering an active management approach? I thought currency overlay meant that a different manager manges the FX risk but within the mandate of the IPS. I don’t see where we are given sufficient information to determine that? Also why would you not use short term rates in active currency management?
Can you be more specific about which exam you’re talking about? CFA? Can’t be as only afternoon Qs so no Q18
The question specifically mention STRATEGIC asset allocation. Strategic = long term therefore short term rates are irrelevant. They would be important for tactical asset allocation.
no mate, which question from which exam, CFAI, Schweser? which exam, which book, etc.
mambo said 2011 Mock , Q18 . Should be obvious that means CFAI mock . Don’t know if Schweser ones are really popular in terms of past papers.
so answer the question for him smart ass. I have no idea where you get an afternoon CFAI 2011 mock from. The only mock in 2012 is a morning set. Hence my question