Fun with Schweser Ethics...

Jill Tillman, CFA, has a client who wishes to invest in private equity. The client’s total portfolio is $80 million. The client wants to invest $10 million in private equity, wants to keep the money invested for 7-10 years, and does not need liquidity. Tillman should: A) invest the client’s money because private equity has the desired properties. B) not invest the money because it represents too much of the client’s portfolio. C) not invest the money because private equity requires a longer holding period than specified by the client.


I am going to have to go ahead and say B

A for me, kind of like client directed trades to a broker who doesn’t offer best execution. If it’s what the client wants, and it’s legal, it’s what the client gets.

B, more than 5% of wealth.

B - as dubbs explained.

fine…all you guys are clearly a level above … I went wih A tooo…because of the description in the text saying the investor did not want liquidity and wanted 7-10 year horizon. So even if the investor says he doesn’t need liquidity, we consider anything above 5% too much for him to invest? doesn’t make sense to me…but then again a lot of things dont…

It’s dumb. Don’t worry about it.

it’s not … if i’m even getting the dumb questions wrong…that’s worrrying… 5 days to go…what a B*%!$^%

I also chose B but that’s a bad question. Tillman should explain the situation to the client and then let the client make a decision.

one more consideration here is that I believe you would probably look at PE in portfolios if they have >= $100M…I think I read that in the notes or in secret sauce…