Chartered Investment Manager (CIM) Practice Exam · Question
Which of the following is a core component that must be clearly defined in a client's Investment Policy Statement (IPS)?
The IPS is a crucial document that outlines the client's investment objectives, risk tolerance, and constraints, providing a framework for all investment decisi
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Question: Which of the following is a core component that must be clearly defined in a client's Investment Policy Statement (IPS)?
Answer options:
- The daily trading strategy to be implemented by the portfolio manager.
- A detailed list of all historical investments made by the client. ✅ The client's investment objectives, risk tolerance, and constraints.
- A guarantee of minimum returns over a specified period.
Correct answer: The client's investment objectives, risk tolerance, and constraints.
Explanation: The IPS is a crucial document that outlines the client's investment objectives, risk tolerance, and constraints, providing a framework for all investment decisions.
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