R3- Overview Of Asset Allocation Flashcards
(17 cards)
Steps for apply invenstment governance
Types of asset allocation approaches (3)
Caracteristcs of an asset class
Similar, unique, correlated, cover, sufficient liquid assets
Steps for justify asset allocation (7)
TORC
Objectives, risk tolerante, time horizon, constrains, determine asset approach, determine asset class, develop asset allocation, simulate results
Fill the blanks: the advantage of global portifolio that mitigate/ minimize _____.
Diversifiable risk or ums
Tatical asset allocation
Used for capture adicional alpha given a temporary opportunity
Diference calendar rebalancing vs. corridor
Fill the blanks: An asset owner policy portifolio is reflected in the ____
SSA - strategic asset allocation inside ips
Fill the blanks: 15 bi pension fund is more likely to invest _____
Passively
Risk aversion , liquid assets, low transaction costs are related with _____ (wider/ tight) rebalancing band
Tight
Difference between capital asset and store in value
Store of value assets like art, whose economic value is realized thorough sale or exchange
Capital asset haverst and replant for example timberlnd.
Describe the two constrains in context of utility optimization ( W and non negative)
All weights must sum 1
And have non negative values
Rebalance will tipically result in ______ (higher/lower) portifolio ______
lower, risk
When mod dur shorter than schedule time how component of return act with other? Capital gain vs. reinvestiment.
On shorter time the capital gain has a higher impact vs. reinvestment.
If expected return is 10% and utility is 6%, this would mean:
The investir value a risky return and risk free rate return at the same Way. The 6% guarantee return value the same of 10% riskier asset.
Explain the diference between equilibrium model, dcf, risk premium for evaluating fixed in come returns
Fórmula - utility fórmula and Explain how to interpret the fórmula
Higher utility is better.
