Individual IPS, restating facts = no credit?

Hi everyone,

I’m a bit confused here, the real CFA exam from last year in the individual IPS question warned that restating facts earns no credit…

My concern is, when filling out the IPS constraints (like liquidity), are you just restating facts like listing the liquidity events? seems that if you just list the expenses, you are just restating facts and will earn no credit… is that correct?

I’m sure the warning definitely threw off a lot of people.

Thank you and best of luck to all!

I recall that the warning was for items like “describe why so and so’s risk tolerance is above average or below average” and not for the liquidity constraint. Once cannot say, “The average workforce is 30” as a reason for low risk tolerance, you would have to explain how the average age effects the risk tolerance. I realize this is for Insitutional, but you get my drift.

I think the problem is i think the answer is the same across the board… like

Shorter duration liabilities results in lower risk tolerance…

You could write that for younger work force, fewer retirees, etc. etc.

But yeah I see what you’re saying…

I just think the solution is always the same = shorter duration liabilities… in which case you might get credit for one but not for the other questions if it tells you each one has to be different… you probably can’t always conclude shorter duration liabilities

I’d differentiate by saying younger workforce = longer duration of liabilities and longer time horizon, so higher risk tolerance. Then…fewer retirees = less annual distributions due therefore lower liquidity requirement and higher risk tolerance.