Help with IPS Questions

CFA Level III Portfolio Management
#1

Hello all. I feel like I am developing learned helplessness with IPS questions. They are in theory really simple - you just copy info from the question into the little boxes. But I feel like I never have the same info as the answer.

For risk, sometimes they list the goals and sometimes not. For return, sometimes they account for inflation and sometimes not. For liquidity, sometimes they only cover expenses, sometimes they net expenses and income, and sometimes they just say liquidity is “below average.” I’ve been doing a combination of CFAI and Schweser. I feel like somehow I always get barely half credit on what should be an easy question. Anyone have a good guide on how to answer these IPS questions? Anyone else experiencing the same thing?

Thanks and happy studying!

#2

For liquidity, consider all income and expenses FOR THE FIRST YEAR ONLY and then net those.

For return, according to Schweser - “return sufficient to…” and then list mandatory goals. Then calculate based on that. e.g. if goal is to have inflation adjusted $X then your return should be calculated as real return, else nominal return.

Risks are a bit tougher, consider risks of not meeting goals and overambitious or conflicting goals.

I used to have a devil of a time with these questions as well. Pay attention to tips from Schweser. Worked for me.