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IFSE - CIFC - Unit 7 Correct Answers Latest Version 2024
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IFSE - CIFC - Unit 7 Correct Answers Latest Version 2024
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IFSE - CIFC - Unit 7 Correct Answers LatestVersion 2024
Role of Portfolio Manager Answer: investors can take advantage of the services of professional
money managers.
to ensure that those objectives are met. Their goal is to attain the highest return possible
Active management approaches Answer: 1. Top-down
2. Bottom-up
Passive Portfolio Management Answer: choose securities according to a specific benchmarkThe
benchmark represents a specific market, such as a stock index Reduces the amount of trading within a
mutual fund
Passive Portfolio Management Considerations Answer: is required to mirror the performance of a
market index
There is a risk associated with passive investments. If the market index drops, the passive mutual fund
will suffer
Active Portfolio Management Answer: based on the idea that not all information about securities is
widely known
relying on their abilities
Portfolio manager qualifications Answer: - required to be registered with the provincial securities
commissions in the provinces in which they choose to operate
- must obtain a CFA designation
- must have relevant experience
, Top-down approach Answer: - look at macroeconomic variable such as GDP of various countries,
interest rates, and employment rates
- then look at industry, sectors or countries that look favourable in terms of their economic standing
- lastly will select companies that have the best potential t meet investment objectives
Bottom-up approach Answer: - focus on individual companies
- economy and market cycles are secondary considerations
- believe a company will succeed even if country or industry is struggling
Main investment styles Answer: - growth
- value
- growth at a reasonable price (GARP)
Growth investment style Answer: - looks for securities of companies with above-average growth
potential
- growing or expanding companies
- growth directly correlates with an increase in share price
Value growth investment style Answer: - looks for securities of good-quality companies that are
undervalued
- may be undervalued due to its sector or country having bad otherwise news
- feels that company's value has dropped unnecessarily and will likely return to better value
Growth at a Reasonable Price (GARP) investment style Answer: The strategy is a combination of
both value and growth investing: it looks for companies that are somewhat undervalued and have solid
sustainable growth potential
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