# return objective

If a question asks you to formulate a return objective, do you need to include a numercal return objective or simply state the specific goal objectives?

In the IFT mock 1, there is a question where the client needs to support her son’s eduction and her father’s nursing home espenses. She would retire 20 years out. So this is a multi-stage horizon. I could establish a numerical return objective for the first 4 years, but there’s not enough info to move beyond that.

I thought I recalled reading that it was a requirement to state a numerical objective along with the stated objectives. In IFT’s answer, he does noyt have a numerical objective, but I wasted extra time on that question trying to compute the required return.

Any idea how this would show up on the actual exam?

Do both

AM section is all about time management, so there is no time to do both…

i think if the question states “show your calculations” then you need to give them a number, otherwise the % number is not required.

you dare challenge mrsmart? SMH at you

As I understand it, when asked for a return objective - that can be answered just in words. A return requirement needs calculations.

Do not do both.

Formulating a return objective means writing out the words: cover expenses, maintain purchasing power, grow the portfolio, whatever.

If they want a calculation, they’ll tell you to do a calculation. If they don’t say, explicitly, to do the calculation, you’re wasting your time by doing it.

What about if you’re asked to construct the objectives and constraints portion of an IPS (no specific mention to calculation), are we supposed to calculate the required return? After all, a specific return percentage should be a part of a real IPS?

For example: Reading 10, Question 11. In the solution, no calculation was required but I think that’s a little strange given that the question asks for a full out IPS.

Just finished 3rd AM exam (2008 through 2010). In all three, the question breaks it down into two parts:

i. Formulate the return objective of Mr. Bob

ii. Calculate the return requirement based on the information presented

Let’s try this again:

If they want a calculation, they’ll tell you to do a calculation. If they don’t say, explicitly, to do the calculation, you’re wasting your time by doing it.