Reading 18 EOC 1-C

[BearFlag]

I don’t get why, in the solution, they say that the band of asset weights within which the proposed TAA would operate is too wide in relation to the permissible range for international equities (which is 5-15% in the IPS)
Thank !

 

[Galli]

The Target allocation is 10% with a permissable range of 5-15%
+/-10% from the target gives an implied range of 0-20% which is outside of the permissable range defined by the IPS.

 

[zulu007]

Thanks Galli.
The key confusion was +/-10% of their target portfolio weights i.e. 0/20% and NOT
+/- 10% of 10 i.e. 9/11%. This was my confusion initially.