Chartered Investment Manager (CIM) Practice Exam · Question
An IPS details an investment portfolio must maintain a maximum equity exposure of 60% and a minimum fixed income exposure of 30%. This illustrates which key aspect of an IPS?
Stipulating maximum equity and minimum fixed income percentages directly addresses the client's risk tolerance by setting boundaries on the portfolio's overall
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Question: An IPS details an investment portfolio must maintain a maximum equity exposure of 60% and a minimum fixed income exposure of 30%. This illustrates which key aspect of an IPS?
Answer options:
- Return objectives ✅ Risk tolerance and constraint guidelines
- Liquidity requirements
- Ethical and social considerations
Correct answer: Risk tolerance and constraint guidelines
Explanation: Stipulating maximum equity and minimum fixed income percentages directly addresses the client's risk tolerance by setting boundaries on the portfolio's overall volatility and capital preservation.
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