10 Years of CFA-I Mock Exams Show this "will" be tested

[daharmattan1]

1) IPS is key…duh. Be able to state their risk tolerance and defend why you picked that. Liquidity and time horizon are by far the two most important constraints.
2) “Pick between two or more pension funds or different foundation/endowments and be able to talk about which have greater ability to take risk and why
3) Know how to solve corner portfolios and pick the most suitable portfolio given an asset allocation.
4) What makes hedge fund benchmarks problematic? What are the solutions to solve that?
5) ID behavioral biases from a passage–both emotional and cognitive and talk about why you selected that bias.
6) You should know about delta in terms of hedging with options, and know the butterfly spread
7) Cobb-Douglass, TFP, and differences in Fed Model vs Yardeni are common, as is the Taylor rule equation
8) Be able to adjust Beta/Duration with futures

 

[Galli]

*prays for all 15 of these items on the AM section

 

[cohiba42]

I am pretty much 100% sure they’re gonna test ethics & GIPS too

 

[wct2010]

Galli wrote:
*prays for all 15 of these items on the AM section

This.

 

[JuniorCk8]

dahar, awesome stuff! thanks for the summation - very helpful in final prep stage to have these topics mastered 100% and having practiced a ton also.
i actually went through 2007-2014 AM earlier today and listed out the minutes/points of each section over the years. Definitely noticed trends the last few yrs.

 

[Cric12]

Can someone type in a nice summary for point 4? hedge fund benchmark and solution. Trying to get a good summary so that I don’t write superfluous in exam if it shows up. Thanks.

 

[jojogaut]

I started in 2005 and I’m up to 2011. I was loose on the time limit for the first one or two but have timed all the other ones. You definitely see some patterns and material that repeats itself year after year with some slight variations of course. Hope past 10 yrs CFAI is a winning strategy for the AM.
Oh boy do I hope so. I do NOT want to have to go through this again!

 

[JSobes]

JuniorCk8 wrote:
dahar, awesome stuff! thanks for the summation - very helpful in final prep stage to have these topics mastered 100% and having practiced a ton also.
i actually went through 2007-2014 AM earlier today and listed out the minutes/points of each section over the years. Definitely noticed trends the last few yrs.

Are the trends you saw consistent with this post?

 

[June06]

Cric12 wrote:
Can someone type in a nice summary for point 4? hedge fund benchmark and solution. Trying to get a good summary so that I don’t write superfluous in exam if it shows up. Thanks.

1) Popularity Bias
2) Survivorship Bias
3) Stale Price Bias
4) Backfill Bias
Solution for 1 and 2
1.
- Equally weighted indices
- Custom benchmark

2. and 4.
- Using FoFs

No solution for 3.

 

[June06]

For 2, consider below (Correct me if I’m wrong)
Foundation/ Endowment
- Smoothing rule
- Importance of the Endowment in the operating budget
- Ability to adapt to drops in spending
- Operating leverage in the Endowed Institution
- Common risk exposures between donor and endowment fund
- Short-term performance of endowment fund
- Amount and Source of external funding
Pension
- Funded status
- Financial status
- Correlation between plan asset and sponsor business
- Age of workforce
- % of active lives relative to retired lives
- Plan features

 

[pokhim]

Nice one!!
I have looked through the past 6 years and IPS/Behavioral consistentl makes up 45-50% of the total AM section. If we boss those questions we’re on our way to a winner!!

 

[Cric12]

June06 wrote:

Cric12 wrote:
Can someone type in a nice summary for point 4? hedge fund benchmark and solution. Trying to get a good summary so that I don’t write superfluous in exam if it shows up. Thanks.

1) Popularity Bias
2) Survivorship Bias
3) Stale Price Bias
4) Backfill Bias
Solution for 1 and 2
1.
- Equally weighted indices
- Custom benchmark

2. and 4.
- Using FoFs

No solution for 3.

Thanks!