Portfolio Mananagement Question

Which of the following is NOT considered an investment constraint in the portfolio management process? A. An investor’s need for liquidity. B. The legal aspects of the account to be managed. C. Limits on the amount of risk the client is willing to accept. D. An investor’s preference to own no stocks of newspaper publisher. Can someone explain why C is the answer ? Thanks in advance!

id like to hear some opinions on this one i would have thought all are constraints

The investment policy statements contains investment objectives and constraints. Investment objectives: Retrun objectives, Risk tolerance. Constraints: Liquidity needs, time horizon, tax concerns, legal and regulatory factors, unique needs and preferences. I guess I look at it as, you always have to start with their risk and return objectives. Then look at any outside factors that could limit what you invest in.

Minor point: Risk and Return are Investment OBJECTIVES, not Constraints

My guess is that limit on amount of risk a client is willing to take relatest to Investment Policy Objectives and is a given thing. Thus, not so much of a “constraint” in PM in a sense. He/She either wants to preserve her capital, see long-term growth, current income etc for a given level of risk… Any thoughts? Cheers.