average risk tolerance

CFA Level III
#1

Has anyone done any exam type questions where the answer has been average? I’m thinking of just going for above / below average

#2

TheBigBean Wrote: ------------------------------------------------------- > Has anyone done any exam type questions where the > answer has been average? > > I’m thinking of just going for above / below > average yes, older question has it. One guy in england who had salary of 75k pounds or something like that. That guy had an ability of averagy. Also endowments which contribute over 85% to budgets

#3

Thanks. Need to rethink that strategy then.

#4

if investor states they have an avg tollerance for risk but their current portfolio actullay has above avg characteristics i would have thought you would say they have an avg willingness however a problem in cfai book said above avg because of the port so ignoring their statement i would have though go with what they say and educate them that their current port has more risk than they would have wanted any thoughts?

#5

ChiTownBull Wrote: ------------------------------------------------------- > if investor states they have an avg tollerance for > risk but their current portfolio actullay has > above avg characteristics i would have thought you > would say they have an avg willingness > > however a problem in cfai book said above avg > because of the port so ignoring their statement > > i would have though go with what they say and > educate them that their current port has more risk > than they would have wanted > > any thoughts? This is from old exam. I will go willingness over ability on exam

#6

willingless over ability unless the willingless is significantly higher than ability than you are supposed to educate the client.

#7

oskigo Wrote: ------------------------------------------------------- > willingless over ability unless the willingless is > significantly higher than ability than you are > supposed to educate the client. Still overall risk tolerance is below avg

#8

i thought it was ability before willingness and they recommend additional education for client to bring the two into line.

#9

I always go lowest of two.

#10

comp_sci_kid Wrote: ------------------------------------------------------- > I always go lowest of two. Me, too, unless willingness is below and ability is very high due huge asset base relative to expenses. In that case, I go average. I think I may include education no matter what.

#11

hezagenius Wrote: ------------------------------------------------------- > comp_sci_kid Wrote: > -------------------------------------------------- > ----- > > I always go lowest of two. > > > Me, too, unless willingness is below and ability > is very high due huge asset base relative to > expenses. In that case, I go average. > > I think I may include education no matter what. why would you go average. I think i remember example where ability is above and willingness is below and they go below

#12

yep, Elizabeth Yeo from 2005 exam, above-verage ability, below-average willingness, overall below-average risk tolerance

#13

volkovv Wrote: ------------------------------------------------------- > yep, Elizabeth Yeo from 2005 exam, above-verage > ability, below-average willingness, overall > below-average risk tolerance ^— yes!