Think its a good idea to share where you got served on recent questions where you had an “ah ha” moment. Maybe trick questions or curveballs. Just got busted up on this schweser question. 2 firms with different mandates. Delta wants to beat benchmarks with sector and specific bond selection. Kappa says “we immunize against i rate exposure and seek positive contibution from bond selection”. then they give you a chart and ask you to evaluate if the mgr is hittin the madate. I blew through it and looked for outperformance vs benchmark in those areas they both said their strategy is. Problem is…kappa wants to IMMUNIZE…not beat. they crushed the benchmark on i-rate mgmt, so I said “they met the mandate”. WRONG…they should have had 0 outperformance vs benchmark to meet their mandate.
i would have thought from the sounds of it Kappa wanting to immunize and use positive bond selection suggests duration matched to horizon (or whatever immunisation method used) BUT active bond selection in search for above benchmark returns.