CFAI MOCK Fixed Inc and Equity Portfolio Mgmt - Sarkar

[dunbelievable]

#5: Based on the information presented in Exhibit 1, Sarkar should recommend to the Daniels Corporation Pension Fund that the most appropriate manager to meet its investment objective is: Manager A has a low P/E, high dividend yield, and a style fit of 87%, which suggests that he is following an active value strategy.
why is it not manager B? he has a style fit of 95% with the little tracking risk and less earnings growth. dividend yield and P/E can be capricious. you don’t need a dividend to be a value stock.

 

[BrewCityCFA]

Don’t try to get fancy and overanalyze things. Answer the question based on CFAI curriculum (even when, based on real world experience, you think its wrong). CFAI clearly states in all the readings that value managers should have low P/E and high dividend yield. Forget about your other notions and just take this as an easy point!

 

[dunbelievable]

you’re right. above what level is a style fit % relevant? 80%?