Portfolio Management Process

Which of the following is NOT a key element analyzed during the planning stage of the portfolio management process?

• Risk Tolerance

• Return Objectives

• Security Selection

• Liquidity Needs

When should an Investment Policy Statement (IPS) be reviewed and updated?

• Only when the portfolio manager decides it's necessary.

• Every few years or when the investor's objectives/constraints change significantly.

• Only at the beginning of the execution stage.

• Only when the portfolio performance is below the benchmark.

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What is the initial step in constructing a suitable portfolio during the execution stage, and what approach is typically used for it?

• Security Selection, using a bottom-up approach.

• Target Asset Allocation, using a top-down approach.

• Purchasing Securities, based on market trends.

• Evaluating Portfolio Performance, using a benchmark.

What action is typically taken by a portfolio manager during the feedback stage when actual asset weights in the portfolio change due to asset prices?

• Update the Investment Policy Statement (IPS) only.

• Rebalance the portfolio periodically.

• Change the client's risk tolerance.

• Ignore the changes as they are temporary.