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IFSE - CIFC - Unit 7 Exam with complete solutions 2024_2025.
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IFSE - CIFC - Unit 7 Exam with complete solutions 2024_2025.
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IFSE - CIFC - Unit 7 Exam with completesolutions 2024/2025
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
Technical analysis - ANSWER-- technique that uses charts of past trends in
currency prices and other factors to forecast future price movements
- chartists
Fundamental analysis - ANSWER-- the study of a company's financial statements
and future prospects to determine its value
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