This is about the question on endowment in 2011 am. I don’t know if it’s discussed. But then I want to know how to deal with it then on the exam?
As per suggested answer, increase in expected inflation increases risk tolerance because the endowment will demand a higher real return in future. I couldn’t think of it that way.
Also, help me how to prepare on behavioral biases and IPS. I know it’s too late. Schweser ruined it all I guess. Had to stop the test just when I reached second question. Pls suggest something.