In typical lovely CFAI style, we get two answers that say opposing things
2007 AM exam, question 2, Part A, if one selected exchange fund.
“a private exchange fund will retain soem exposure to upside price movements”
Part B, reasons to not select and Exchange fund:
If Candidate Chose “equity collar”, then one can eliminate Exchange Funds because
“This strategy would eliminate any significant upside potential assoicated with the position in Pitt”
So which is it? Do Exchange funds preserve upside or not? Why would they not, I mean the stock is in the exchange fund - once the exchange takes place, so why woudl they not be exposed to its movement, albeit in lower proportions?