Free CFA-Level-I Exam Braindumps (page: 8)

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With regard to real estate, all properties must be included in at least one ________.

  1. account
  2. investment type
  3. composite
  4. sector
  5. portfolios

Answer(s): C

Explanation:

Consistent with the general requirements for all composites, all properties with discretionary fee-paying investors must be included in at least one account. Because of the unique nature of individual real estate investments, however, composites containing single properties are appropriate in many cases.



Each ________ needs to comprise portfolios or asset classes that represent a similar investment goal.

  1. return
  2. composite
  3. value
  4. benchmark
  5. mix

Answer(s): B

Explanation:

All actual fee-paying discretionary portfolios must be included in at least one composite defined according to similar strategy or investment objective.



ERISA fiduciaries must adhere to the following prudent procedures:

- establish a written investment policy for the plan
- diversify plan assets
- make investment decisions with the skill and care of a ________
- monitor investment performance
- control investment expenses
- avoid prohibited transactions

  1. member
  2. supervisor
  3. prudent expert
  4. none of these answers
  5. trader

Answer(s): C

Explanation:

These procedures are stipulated under the detailing of ERISA fiduciary duties, to ensure that the fiduciary complies with the duty to act with prudence. Under ERISA, the fiduciary is held to a higher standard than the Prudent Man Rule. The ERISA fiduciary needs to be as prudent as the average expert, not simply as prudent as the average person.



________ establishes the fiduciary principles for U.S. corporate pension plans.

  1. AIMR
  2. PSPC
  3. ERISA
  4. WTO
  5. UMIFA
  6. None of these answers
  7. RELAC

Answer(s): C

Explanation:

ERISA establishes the fiduciary principles for U.S. corporate pension plans. ERISA is very specific in its definition of fiduciaries and their responsibilities and investment managers of U.S. corporate pension plans are subject to ERISA's fiduciary provisions.






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