Example no 4 in CFA curriclum question no 3: “Bocage International is a hedge fund that actively bets on the relative attractiveness of stocks, interest rates, currencies, and commodities. Its investment in equities is limited to futures and options on exchange-traded equity indexes.”
Solution to this question says “Bocage’s situation is very similar to that of MegaCosmos in Question 1, and top-down forecasting is thus appropriate. In Bocage’s case, exposure to individual stocks is not permitted so the analysis need not be carried down to the level of industry groups or market sectors.”
Can anyone explain this to me? How come top down is appropriate, I am fine with the later part of the answer.
Thanks in advance