Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

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Nội dung chi tiết: Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions bution of this material is strictly prohibited, infofn fmquiz.com.CFA Level III Mock Exam 4 - Solutions (AM)FinQuiz.com -4'11 Mock Exam 2018 (AM Sessi

on)The morning session of the 2017 Level III CFA Examination has 8 questions. For grading purposes, the maximum point value for each question is equal Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

to the number of minutes allocated to that question.QuestionsTopicMinutes1Portfolio Management - Behavioral Finance202Portfolio Management - Institut

Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

ional Investors203Portfolio Management - Fixed Income Investments194Portfolio Management - Individual-Asset Allocation395Portfolio Management - Asset

Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions uationTotal:180FinQuiz com © 2018 • Al rights reserves2CF A Level III Mock Exam 4 - Solutons (AM)ỌIT.STIOX 1 HAS FOUR PARTS (A, B. c, D) FOR A TOTAL O

F 20 MIXITESDano Parker works as a portfolio manager at Picasso investments (PTCIN). a large and reputable financial advisor)' firm offering a range o Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

f capital management services and investment products to individual and institutional investors. Parker has been with the firm for over five years now

Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

. and has managed more than fifteen client portfolios. As such. P1C1N lias appointed Parker to appraise the performance of priv ale wealth portfolios

Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions inance with respect to the behaviors of individuals do not hold true. Parker was nor sure what effects this might have on optimal portfolio constructi

on by financial market participants. To discuss this further, Parker invited David Hulsey, a behavioral financial analyst, to talk aboitt investor beh Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

avior 111 detail. During then conversation. Hulsey made the following comment:“I believe that investors behave rationally when making investment decis

Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

ions and try to maximize rhe expected utility, given their budget constraint. When faced with new information, market participants revise expectations

Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions sis of the ‘Prospect Theory'. but was not sure how this theory provided an alternative explanation to investor behavior He was. however , convinced th

at the theory explained apparent deviations in decision making from those explained under the utility theory.A. Justify how the prospect theory suppor Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

ts Parker's notion of an apparent departure of investor behavior from the behavior of the rational economic man. Give three ways the prospect theory d

Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions corative lamps. The lighting industry has seen tremendous growth over the past decade due to a rising trend of professional interior designing of home

s and offices. Historical data of the past 15 years shows earnings growth for SFI at 1.0-1.5% above the GDP growth rate. Just recently, however, the F Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

inn reported a chop of 5.0°0 ni earnings growth due to a number concerns regarding the supply of raw materials. In addition, a few other firms also re

Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

ported losses for the recent quarter. In developing his forecasts. Parker decided to revise his earnings estimate downward for the stock in order to a

Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions or SFI Give one example where such a bias may result in excessive trading by financial market participants.(4 minutes)While reviewing the asset alloca

tion decisions of his clients, and their stated preferences during regular meetings for updating their IPSs. Parker noticed that many portfolios lacke Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

d the appropriate amount of diversification. as would be present if investors behaved rationally and took a holistic view of their portfolios Parker w

Volume II behavioral finance, individual investors, and institutional InvestorsCFA level 3CFA finquiz Level3Mock2018Version4JuneAMSolutions

as assiued that this was due to the presence of behavioral biases.c. Give three behavioral explanations for inadequately diversified portfolios. State