Where should you note if they have a concentrated portfolio?
I think in the liquidity constraint section
liq constraints
and perhaps unique if its concentrated due to low basis holdings.
And unique circumstances - need to indicate that rebalancing will be required.
so put it in both?
how about taxes as well since if they sell it there may be siginficant taxes and does this come into play with willingness to take risk?
sure - but unique should focus on the fact that rebalancing should be considered.
if its low basis then i would make a note in the liquidit, tax and unique section. If its just concentrated i would note in unique but make a statement that alludes to possible tax consequences in the unique section. i wouldn’t have a separate sentence in the tax section just in case of a concentrated position having potential tax consequences.
i thought only unique circumstances. edit: unless it’s a private holding why would you need to mention it in liquidity?
^so you can put it in multiple places just distinguish why it belongs there?
why would you put concentrated portoflio in liquidity constraints? that makes no sense (please provide example to prove me wrong) Unique constraints - mention it here if you have a concentrated position Low basis - have to mention in Tax too (dunno if you can or cannot cross reference it to unique) look at 2007 exam, they mention it in tax
oskigo Wrote: ------------------------------------------------------- > i thought only unique circumstances. edit: unless > it’s a private holding why would you need to > mention it in liquidity? i agree - no point to mention unless it is very illiquid (PE, Hedge Fund with lockup, Huge RE piece)
^ yes if it is illiquid liduidity makes sense otherwise no.
concentration of a security = unique circumstances illiquid concentration of a security = unique and liquidity illiquid, low cost basis concentration of a security = unique, liquidity, and tax I can’t imagine they can deduct points if we write correct, factual things.