2010 MOCK:
First one question… not sure that i agree with the CFAI answer… It says that the BL approach incorporates the investor’s views. Finnegan has a positive view of the Euro retail clothing sector. The BL approach allows her to incorporate htese views, while standard MVO does not.
-In standard MVO, you input your own capital market assumptions… Am i wrong?
Having a tough time grading myself on the morning sections, but extremely tough on the AA. Doing the 2010 mock, it asks for advantages of resampled EF and Black Litterman…
Would the below answers work?
Advantages of resampled EF:
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Since Resampled EF is the average of many EFs, this would lead to less rebalancing and lesss transaction costs.
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Would get more asset classes, since its more diversified when changing the variables by a small amount.
Advantges of BL approach:
- by using the world index, she would start with a more diversified portfolio instead of just euro equities and bond. She can also incorporate her own views of European clothing into her investment strategy.
Thanks!