You are forgetting a key part: increasing active risk with an uptrending mkt = CPPI
CPPI :)… confident about this one. Again, i literally looked for volatile… but not there. Volatile was in different question but not this one.
I’ll probably get this one wrong too and my AM exam score is now looking pretty dismal. But the reality is that the client specifically said in the second line. “The client agrees with the market outlook of Kadar.” And if you go back into the prevous text written under what Kadar thinks, he says a volatile market environment.
I literally wrote out a CPPI answer, then crossed it out and said, well because this guy Kadar says its volatile and he agrees with him… regardless of his willingness to increase risk, CPPI will be buying and seling at the wrong time even in a market that trends higher over time.
It’s not like CFA bothers to put in tolerance rules or anything that would differentiate. It’s pretty disappointing that my pass or fail is going to hinge on questions like this, given that I know the vast majority of the material cold and CFAI is just incompetent in writing tests, mocks, etc. But I guess it’s not much of a surprise given that they spend an entire chapter confusing volatility (as a pricing component of a stock option) and volatility (as in price movement of underlying).
However, it is ridiculous that an entity with an $100 M budget is such an amateur hour when it comes to matters like this.
I faced the same problem in questions 2, 4, and 7. The questions did not seem clear at all. Question 7 took me a lot of time to understand what was going on and STILL i did it wrong although I KNOW how to solve it. Not to mention that question 9 was left “untouched”. I based my hopes on making it up in the afternoon session however i did mess up big time. And again as you mentioned, I KNOW THE VAST of the majority cold but… Yeah im 95% confident that I will sit for the exam again next year :).
Guys, i will write down somewhere here in the AF my analysis of the Program i made before preparation to the exam and how i’d unscrambled their possible traps and how these should be avoided on the exam day. That was worth of my time spent! Really. However, i prefer to wait until the results will be promulgated - this is only the assesment of my endevours.
+1.
CPPI it is - very confident about this one
CPPI
^ VWAP can be gamed
and I think I chose CPPI… don’t remember the exact question now.