From the course: Cert Prep: CFA Exam Level 1
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Key topics: Portfolio management
From the course: Cert Prep: CFA Exam Level 1
Key topics: Portfolio management
- [Instructor] Portfolio management is one of the most important and most integrative topics on the CFA exam. It combines risk, return, and investor constraints, and shows up both in individual questions and item sets. In this video, we'll walk through some high-level testing strategies for this section so you can approach each question with confidence. Let's start with Strategy 1: Know the IPS structure cold. The IPS, or investment policy statement, is the core of portfolio construction. Many questions will test whether you understand how to translate investor information into portfolio design. Remember, the IPS breakdown. Objectives lead to return and risk tolerance. Constraints around liquidity, time horizon, taxes, legal and regulatory issues, and unique circumstances. Here's a tip. If a question gives you a client profile, map the facts to the IPS section. That often reveals the answer. Strategy 2: watch for…
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