Whats the EXACT difference between profit maximization and contigent immunization Here is what i got so far (from CFAI): Return maximization - portfolio always stays fully immunized in the classical sense. Instead of minimizing the immunization risk against nonparallel rate hanges, however a trade-off between risk and return is considered Contigent Immunization - Integrate immunization strategies with elements of active bond portfolio management - Provides a degree of flexibility in pursuing active strategies while ensuring a certain minimumum return I mean are you kidding me? Asking questions on such minuscule details? I am about to throw up
I got this one wrong to, thanks to stupid Schw. where they say that return maximization is the concept behind Contingent Immunization ( which makes sense if you ask me, you want to maximize return as long as it’s safe to do so, otherwise immunize)
mo34 Wrote: ------------------------------------------------------- > I got this one wrong to, thanks to stupid Schw. > where they say that return maximization is the > concept behind Contingent Immunization ( which > makes sense if you ask me, you want to maximize > return as long as it’s safe to do so, otherwise > immunize) i hear ya. Just trying to convince myself i am not a fkup 
That one I knew +3 for me!
i would defintley disagree that its a miniscule detail…if you read the text…and bracket off individual LOS’s…thats something I had highlighted months ago when reading Fixed Income for the 1st time.
pimp Wrote: ------------------------------------------------------- > That one I knew +3 for me! how did u know Schweser doesnt have it?
cfacfacfa Wrote: ------------------------------------------------------- > i would defintley disagree that its a miniscule > detail…if you read the text…and bracket off > individual LOS’s…thats something I had > highlighted months ago when reading Fixed Income > for the 1st time. it doesnt add to understanding of how immunization works. Just a wording.
I’m at the stage where I’ll just take a -3 over things like that.
I think good example of profit maximization is going barbell portfolio if you expect a twist in the curve
regarding the answers of advanages of mutilple immunization over cash flow matching 1 .useing available bonds to statisfy liabilites schedule 2. assume a conservative rate of return for cash balance I’m quite confused by these two points. Doesn’t cash flowing matching also use available bonds to statisfy liabilities? For cash flow matching, CFA book p.356 states " for cash flow matching, a conservative interest assumption is appropriate". What’s this about? It seems to be opposed to the point 2. ??? Please help me to clarify these.
comp_sci_kid Wrote: ------------------------------------------------------- > I think good example of profit maximization is > going barbell portfolio if you expect a twist in > the curve Would this not increase the immunization risk?
CFA-NJ Wrote: ------------------------------------------------------- > comp_sci_kid Wrote: > -------------------------------------------------- > ----- > > I think good example of profit maximization is > > going barbell portfolio if you expect a twist > in > > the curve > > > Would this not increase the immunization risk? it will but it is a profit maximization technique