MOPAHT Wrote: ------------------------------------------------------- > > It’s not an inflation to multiply. You pay fee’s > on startin sum of assets, so you shuld PLUS not > Multiply (got the same trap and spent 30 min on > it… 
hmm… that actually makes a lot of sense. but boy, what a technicality to test on a portfolio allocation question. allocation for heaven’s sake. test us on allocation, why this?
does any one remember the minutes allocated to each q in am ? i knw its difficult but it would be of help if someone posted it
the IPS was 36 and the DB plan was 36 as well. The other 9 were about 10-15 minutes
IPS 36 was incl the behavioural stuff?
no. just IPS.
equity_research_nds Wrote: ------------------------------------------------------- > does any one remember the minutes allocated to > each q in am ? > i knw its difficult but it would be of help if > someone posted it just wait, they’ll publish it soon for 2009 candidates
Did you calculate the excess return for the DB plan in the AM ? I am dying to know how to do this one.
it’s 7% + 2.5% before, but the discount rate down to 6.5% and the committee wanted the total risk the same, so need to it’s 7 + 2.5 - 6.5, something like that
I don’t buy that, that’s too simple. They gave you 4 minutes for this calculation. There was a lot of info given about the liabilities to be paid in 2008, and the company contribution, and other details. I calculated the shortfall in 2008 based on the numbers given and worked a return number. But I’m not sure it’s correct. What about the risk objective: minimize probability that pension assets fall below 60% of PBO ?
I think you overthink on that one, if it’s not like that, it’s totally out of the scope of the CFA L3 
mo34 Wrote: ------------------------------------------------------- > I don’t buy that, that’s too simple. They gave you > 4 minutes for this calculation. There was a lot of > info given about the liabilities to be paid in > 2008, and the company contribution, and other > details. I calculated the shortfall in 2008 based > on the numbers given and worked a return number. > But I’m not sure it’s correct. > > What about the risk objective: minimize > probability that pension assets fall below 60% of > PBO ? i tried to calculate that(60%PBO), but the number you get is less than the current value of the pension assets…didn’t make sense to me
There was about 114 million missing from the 2008 payments (liquidity constraint). I divided this number by the 2007 assets and got return needed = 1.6%. I used that as the excess return needed. But I lost valuable time on that one.
they specifically mentioned that they want to keep the total return the same level as 2007, didn;t mention meeting liquidity …
that’s smart, but is there a possibility that the payments will be credited to pension assets?? just thinkin…
Liquidity constraint: " Net payment needed after substracting sponsor contribution", that’s per CFAI definition for DB plans.
i’m feeling weak
AM: Too long for the time given! PM: Piece of cake… We in London had some issues at the testing site in the morning… - Microphones stopped working when the instructions were being read out … so some started some didnt…a bit of a mess… - Bathrooms were locked, creating huge queues in front of only one that was open…again a mess in the morning!
CFAAtlanta Wrote: ------------------------------------------------------- > jmychasi Wrote: > -------------------------------------------------- > ----- > > yes…at first i thought self dealing…but > > then i realized there was clearly a self > interest > > > > insuficcient effort > > > No… entrenchment strategy. Insufficient effort > is if you are a lazy bum. ] The question said which is least likely. Ans: Insufficient Effort
Agreed Etienne!
I tought the least likely was self-dealing… he wasn’t trading his own shares of the company in fact (correct me if I’m wrong, but the question didn’t say it). Insuffcient effort was OK since the question stated the the company was having bad results when he did the “extravagant” project.