2019 CFA level 3 qbank r 5 6 overview of the asset management professionalism in inv questions

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Learning Management System

Question #1 of 8
Which of the following statements regarding the investment management process is most

accurate?

A) The IPS should be reviewed annually.
B) The IPS is the working document between the investment advisor and client.

Question #2 of 8

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C) The portfolio is only rebalanced when client circumstances change.

Which of the following is not part of an e ective investment governance model?

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A) Establishing client objectives.
B) Determining manager compensation.

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Question #3 of 8

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C) The process of setting an asset allocation.

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Which of the following comments regarding major industry trends is most correct?

A) Robo-advisors o er wealth management services without direct contact between the

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client and manager.

B) The use of big data is tied to the growth of arti cial intelligence.
C) Passive management is a declining portion of the investment business.

Question #4 of 8
Which of the following future trends poses a challenge to the investment profession?

A) Consumerism.
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10/11/2018

Learning Management System

B) Segmentation.
C) Standardization.

Question #5 of 8
Which of the following is least likely to be an e ective method for professions to establish
trust?

B) Maintain a consistent body of expert knowledge.

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A) Have high entry requirements.

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C) Emphasize regulation as the mechanism to monitor professional conduct.

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Question #6 of 8

Decision-reversal risk is likely to:

A) occur when a manager panics during a market crisis.

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B) create a skewed distribution of portfolio return.

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C) occur in large institutional portfolios with exposure to alternative investments.

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Question #7 of 8

Carla Smitz, CFA, is working with new, young clients Terry and Janice Dillard to develop their
investment policy statement (IPS). Smitz should most likely take into consideration:

A) their human capital.
B) their risk tolerance.
C) both their human capital and risk tolerance.

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10/11/2018

Learning Management System

Question #8 of 8
What process is used to revise and update the CFA Institute Global Body of Investment
Knowledge to ensure that it is globally relevant and re ects current best practice in the
investment profession?

A) Practice analysis.
B) Competency review.

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C) Member engagement.

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