NO.PZ202301040900001001
问题如下:
(1) Identify the current investment approach (i.e., model) utilized for Whatsit’s existing pension plan. Justify your response and identify one advantage and one disadvantage for this approach.
选项:
解释:
Whatsit uses the Norway model.
Justification:
Client utilizes low-cost passive investments.
A 60/40 asset allocation
Advantages (any one of these is acceptable):
Easy to understand
Low costs
Transparent investments
Low risk of poor manager selection
Disadvantage:
Inability to capture returns over markets, that is, limited value-added potential
The current investment approach (i.e., model) utilized for Whatsit’s existing pension plan is Norway model.
The approach he used is characterized by high allocation to public equity, fixed income, passive management with tight tracking error. Like 60% domestic equity and 40% investment-grade fixed income in mainly low-cost passive investments.
The advantage of this approach is low cost.
The disadvantage of this approach is limited value-added potential.