A client IPS specifies that the portfolio should maintain a minimum of 10% in liquid assets (cash or money market instruments) at all times, to cover potential unexpected personal expenses. This constraint would primarily fall under which section of the IPS?

Question: A client IPS specifies that the portfolio should maintain a minimum of 10% in liquid assets (cash or money market instruments) at all times, to cover potential unexpected personal expenses. This constraint would primarily fall under which section of the IPS?

Answer options: ✅ Specific investment policies / Asset allocation guidelines

• Investment objectives
• Risk parameters
• Evaluation and reporting

Correct answer: Specific investment policies / Asset allocation guidelines

Explanation: Maintaining a minimum percentage in liquid assets is a specific policy guideline that directly impacts asset allocation and portfolio construction, ensuring liquidity needs are met. This is a practical implementation detail.