Love the first question. Love how they come up with violations out of nowhere. i am talking about 14.3. 1) No description of the firm 2) No description of clients 3) No statement of allocation to “ALL” accounts yet Schweser pulls violation out of the a$$. I think they do it on purpose. I looked all over the reading to find these key points and i couldnt. Thanks schweser.
Agreed. Got a 67 on this exam. Was somewhat disappointed. Though I knew Rebalancing stuff and only got a 1/6 (though in fairness I thought the way they tested this a bit nutty), thought I wasn’t so hot on VAR stuff and got 5/6…go figure. I think 67 would crawl me across the line…here’s to hoping
CFAI is guilty too. Don’t read below if you plan on taking Sample #3. Question was which is least likely an advantage of cashflow matching a) easy to understand b) requires less money to fund liabilities c) uses available bonds to satisfy funding schedule d) assumes a conservative rate of return for cash I chose b since if you’re projecting a small rate of return for cash that means the strategy requires more money to fund liabilities. but no, answer is a), ease of understanding is not an advantage…Oh but it is for 8 different types of VAR? give me a break.
tank i agree, i made same mistake
^^^wait how does cash flow matching require less money?
from CFAI rd 27 pg 354-356 …a minimum immunization risk approach should be as good as cashflow matching and likely will be better, because an immunization strategy would require less money to fund liabilities then later on “cf mathing is easier to understand…this ease of use occassionally supports its selection in dedication portfolio strategies”
thetank it was “chose the best out of the following” type of crap. hate those ones. Another one was on minimizing risk
I get that, the question is whether cf matching requires less money. One certainly does not deduce that from reading the text. Maybe I missed something.
CF requires MORE money then classical immunization
I agree. so the statement under b) was outright wrong and thus should’ve been the answer to that question