Return Generating Models
A return-generating model can provide investors with an estimate of the return of... Read More
There is no standard format to the Investment Policy Statement, but most conform to a basic structure. The two key sections are the investment objectives and the investment constraints.
Typical IPS Structure
The IPS document usually follows the structure below:
- Introduction
- Description of the client
- Statement of Purpose
- Purpose of the IPS
- Statement of Duties and Responsibilities
- Duties and responsibilities of all parties – client, advisor, custodians
- Procedures
- The steps that will be undertaken to keep the IPS updated and procedures to be followed in response to various contingencies
- Investment Objectives
- The client’s investment objectives
- Investment Constraints
- The client’s investment constraints
- Investment Guidelines
- Information on how the investment policy should be executed and includes the permissibility and exclusion of assets
- Evaluation and Review
- Guidance on obtaining feedback for investment results
- Appendices
- Strategic asset allocation (SAA) – also known as the policy portfolio, provides the baseline portfolio allocation
- Rebalancing policy
Question
Which section of the investment policy statement is likely to contain information on leverage limits, maximum derivative exposure, and the exclusion of stocks from a particular industry?
A. The procedures section.
B. The investment guidelines.
C. The evaluation and review section.
Solution
The correct answer is B.
The investment guidelines section contains information on how the investment policy should be executed and includes the permissibility and exclusion of assets.
Sergio Torrico
2021-07-23
Excelente para el FRM 2
Escribo esta revisión en español para los hispanohablantes, soy de Bolivia, y utilicé
AnalystPrep para dudas y consultas sobre mi preparación para el FRM nivel 2 (lo tomé una sola vez y aprobé muy bien), siempre tuve un soporte claro, directo y rápido, el material sale rápido cuando hay cambios en el temario de GARP, y los ejercicios y exámenes son muy útiles para practicar.
diana
2021-07-17
So helpful. I have been using the videos to prepare for the CFA Level II exam. The videos signpost the reading contents, explain the concepts and provide additional context for specific concepts.
The fun light-hearted analogies are also a welcome break to some very dry content.
I usually watch the videos before going into more in-depth reading and they are a good way to avoid being overwhelmed by the sheer volume of content when you look at the readings.
Kriti Dhawan
2021-07-16
A great curriculum provider. James sir explains the concept so well that rather than memorising it, you tend to intuitively understand and absorb them.
Thank you ! Grateful I saw this at the right time for my CFA prep.
nikhil kumar
2021-06-28
Very well explained and gives a great insight about topics in a very short time. Glad to have found Professor Forjan's lectures.
Marwan
2021-06-22
Great support throughout the course by the team, did not feel neglected
Benjamin anonymous
2021-05-10
I loved using AnalystPrep for FRM.
QBank is huge, videos are great.
Would recommend to a friend
Daniel Glyn
2021-03-24
I have finished my FRM1 thanks to AnalystPrep. And now using AnalystPrep for my FRM2 preparation. Professor Forjan is brilliant. He gives such good explanations and analogies. And more than anything makes learning fun. A big thank you to Analystprep and Professor Forjan. 5 stars all the way!
michael walshe
2021-03-18
Professor James' videos are excellent for understanding the underlying theories behind financial engineering / financial analysis. The AnalystPrep videos were better than any of the others that I searched through on YouTube for providing a clear explanation of some concepts, such as Portfolio theory, CAPM, and Arbitrage Pricing theory. Watching these cleared up many of the unclarities I had in my head. Highly recommended.