Chartered Investment Manager (CIM) Practice Exam · Question
A Canadian investor's Investment Policy Statement (IPS) outlines an expected return objective of 6% per annum and a willingness to accept moderate risk. Which of these additional criteria is essential for a comprehensive IPS?
A comprehensive IPS should include specific benchmarks against which the portfolio's performance will be measured. This allows for objective evaluation of wheth
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Question: A Canadian investor's Investment Policy Statement (IPS) outlines an expected return objective of 6% per annum and a willingness to accept moderate risk. Which of these additional criteria is essential for a comprehensive IPS?
Answer options: ✅ Specific benchmarks for performance evaluation.
- A list of all individual securities to be purchased.
- The advisor's personal investment preferences.
- A detailed analysis of individual market cycles.
Correct answer: Specific benchmarks for performance evaluation.
Explanation: A comprehensive IPS should include specific benchmarks against which the portfolio's performance will be measured. This allows for objective evaluation of whether the investment objectives are being met. It acts as a standard for comparison.
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