Key formulas for PM

[Batman1]

Given PM has changes dramatically, I’m struggling to find good practice material. Though it is a pretty small and relatively easy section.
Currently the key formulas I know are:
IR = TC x IR x sqrtBR
Optimal Sharpe / Optimal Active Risk
Were there any more?

 

[tau281290]

Expected active return = IC x BR^0.5 x active risk
Expected active return = IR x active risk (can someone confirm if this is right?)
Total ecess return = Sharpe Ratio Benchmark + expected active return
weight on active portfolio = Optimal amount of risk / Active risk
Some more formulas from intertemporal rate of substitution

 

[krokodilizm]

TVA=TVSS+TVAA
Total value added=Total value from Security Selection+Total value from Asset Allocation

 

[abeshak sindhi]

Do we also need to the formula for IC based on market timing?

 

[Batman1]

Yes. IC = 2(% correct) -1

 

[abeshak sindhi]

Batman1 wrote:
Yes. IC = 2(% correct) -1

Were you able to find this formula is cbok?i could not?what about sector rotation?

 

[tau281290]

Batman1 wrote:
Yes. IC = 2(% correct) -1

Never seen this anywhere

 

[JayWill]

tau281290 wrote:

Batman1 wrote:
Yes. IC = 2(% correct) -1

Never seen this anywhere

I did, in a Schweser practice exam question. So I went to the CFA curriculum to find the forumla and it just wasn’t there unless it’s buried somewhere. I highly, highly, doubt we’re going to be asked to calculate a TC. We will need to understand how to interpret it though.

 

[tau281290]

That could be from last year as there was a major overhaul of portfolio management this year.

 

[Batman1]

It is in Schweser - IC of a market timer

 

[tau281290]

which LOS is this?

 

[Yayyywork]

If you do the PM section from the 2015 mock even though the readings have changed I found the substance of the questions in the CFAI mocks to be similar. I suck at PM though so who knows