According to schweser ability should be below average coz she has no income, and all expenses must be paid off of the portfolio. Acording to CFAI she has above average risk tolerance coz she has large asset base. (her expenses are about 5%) Can anybody solve the contradiction?
are u saying ability or willingness or overall?
I am talking about ability…
her asset base is what? over 10m? how can she have below average ability?
After looking at the 2006 Exam, same situation here.
turkish i warned you to stay away from schweser AM exams…
CSK, look at the very first question of schweser. Vol 1 Exam 1 AM Q1 The guy has $5 mil asset base. And his total outflows are $154 K (150 salary - 300 expense). Schweser: Ability to take risk: Below average. The portfolio must support substantial portion of the required outflows, including living expenses for xxx. Meeting the required expenditures and maintaining the value of portfolio are primary concerns. The portfolio cannot withstandmuch volatility. the difference is here this person is older, but schweser doesnt even mention it. talking about outflows and … This really impairs my judgement, cant establish a reference.
i had the same problem. schweser states if your spending depends on your portfolio (and you have no salary to cover spending), then you have low ability.
man I am trying to forget everything about schweser’s Port mng answers. waste of time
I had no clue of the value of MYR so just did a quick comparion of it to her expenses to determine that it was a substantial asset base, unlike say 10 million JPY
I was mighty sick of Mrs Yeo by the end of that exam.
Yeo’s ability is abover avg. but her willingness is below avg so overall it is below avg.