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  3. CIMP - Certificate In Investment Performance Measurement
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  5. CIMP - Certificate in Investment Performance Measurement

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Portfolio Performance Measurement questions with answers.
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  • CIMP - Certificate in Investment Performance Measurement
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  • CIMP - Certificate In Investment Performance Measurement

Portfolio Performance Measurement questions with answers.

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  • September 23, 2024
  • 2
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • portfolio performance measurement questions with a

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  • CIMP - Certificate in Investment Performance Measurement
  • CIMP - Certificate in Investment Performance Measurement

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Portfolio Performance Measurement
questions with answers.

Passive Manager ANS -Low Fee

Low Turnover

Aim for Market Wide return

return = risk merits



Active Manager ANS -High Fee

High Turnover

Beat MKT

return > risk merit



Agency Problem of Fund Management ANS -Different Incentives

Client: High return, low cost

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Manager: more money, high fees



Total Return Problem ANS -Because of the expected return-risk relationship

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The manager will always take on more risk in order to get the higher return!



Performance Measures ANS -1.M-Square -use this measure if you plan on allocating the entire portfolio
to a single fund. The M-Square lets you decide which fund has the best risk-adjusted return.

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2.Treynor measure - use this measure if you plan on allocating the portfolio to multiple funds (i.e., you
form a fund of funds)

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