I’m practicing being quick and brief in my answers, using bullet points when necessary. However, it seems when I look at the answers to EOCs, CFAI has these very long winded answers. I seems to have made most of the key points but I usually may have left out some key details.
The following is my response to EOC Question #1 in Reading 14. It seems CFAI has 5x the words in their final answer.
The following is my response to EOC Question #1 in Reading 14. It seems CFAI has 5x the words in their final answer.
- Human Capital: one’s career and ability to earn money in the future.
- Financial Capital: one’s assets including savings, stocks, bonds, real estate, etc.
- One needs to take into consideration the amount and volatility of future income in investing one’s financial assets.
- If one’s future income is bond-like, emphasize equities.
- If one’s future income is equity-like, emphasize fixed income.