am i the only one that multipled the 08 dividend times teh growth rate? i thought we were estimating the 08 PE therefore it should be the 09 divident rate no?
volkovv Wrote: ------------------------------------------------------- > former trader Wrote: > -------------------------------------------------- > ----- > > SRI has a growth and small-cap bias and both > > answers were among the choices. > > I posted it on SRI thread, but here it is again: > > CFAI V4, p. 130 says: > > “…applying a negative screen, the portfolio > manager may exclude (because of environmental > concerns) companies from basic industries and > energy, which sometimes present a concentration of > value stocks; as a result the portfolio could have > a growth bias” > > “SRI mutual funds have been documented to have an > average market-cap bias toward small-cap shares” > > It is correct that SRI have to biases one towards > growth and one towards small-cap. But these biases > are manifested under different conditions. In our > question, by indicating value sectors they were > leading us towards growth bias. Small-cap bias > wasn’t really applicable. I must be an idiot. I was trying to make something out of the fact that it said the growth manager dispensing the advice had seen the RFP. That made me think: if the growth manager has seen the RFP, the SRI fund must be a growth mandate and so the relevant bias must be small-cap! As I was filling in the little circle for my answer, I was thinking: “why the hell are they testing my detective skills?” Tha
johngalt Wrote: ------------------------------------------------------- > With respect to enhanced indexing vs alpha/beta > separation vs core-satellite, the problem stated > they wanted to minimize misfit risk, which I > believe eliminates a core-satellite without > completion, they also wanted a multi-manager > portfolio in which they were paying appropriate > fees for alpha and beta respectively. My > impression of enhanced indexing is that it is a > single manager. Additionally, it did not state > long only, it stated equities only…definately > alpha/beta separation. I’m with you. I think the strange “hold-only” phrase and the reference to not wanting to pay for beta (hinting to alpha-beta separation)… was all to get to the answer of portable alpha (which clearly delineates the cost of alpha from beta). The book makes a point of saying that you don’t need to be able to short equities to go the portable alpha route. I don’t know why so many people are saying core-satellite minimises misfit risk… I think they must have missed the point of the reading, which says a) core-sat CREATES misfit risk and b) you can offset misfit with completion, but then you lose part of your active return.
chintz Wrote: ------------------------------------------------------- > core-satellite reduces misfit risk because the > active managers can have their own “normal” > benchmark to be compared against, instead of > general benchmark. You definitely missed the point. The fact that the normal portfolio differs from the general benchmark CREATES misfit risk.
Just to be clear on my “core-satelite minimizes misfit comment” Core-staelite minimizes misfit risk relative to full blown active strategy. Completness portfolio is the one that minimizes misfit risk the most. This question was ambigously worded and core-satelite seemed to be the best of all poor choices present.
volkovv Wrote: ------------------------------------------------------- > Just to be clear on my “core-satelite minimizes > misfit comment” > > Core-staelite minimizes misfit risk relative to > full blown active strategy. Completness portfolio > is the one that minimizes misfit risk the most. > This question was ambigously worded and > core-satelite seemed to be the best of all poor > choices present. yes the key here was that it was compared to a full active strategy.
Same here. that’s what’s unfortunate with the way CFAI frames their questions; went with core-satellite as “best” response. wasn’t there also some reference to keeping fees low?
apologies for bringing back a bit of a ghost; memory is fading fast but I thought the repo question referred to maturity of the collateral as an option rather than maturity of the repo itself. If so reckon that’s the correct option. Just wandering if that jogs anyone’s memory.
repo question said maturity of repo, not collateral (I knew that maturity of collateral is irrelevant and double checked)
^^^ agreed I double checked that and it def said maturity of repo.
There was a PM question on which strategy to choose…I had “stock based enhanced indexing” instead of “core satellite” anyone have that