Portfolio Management in Practice, Volume 1

CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion for ethical behavior in investment markets and a respected source of knowledge in the global financial community. The end goal: to create an environment where investors’ interests come first, markets function at their best, and economies grow. CFA Institute has more than 155,000 members in 165 countries and territories, including 150,000 CFA® charterholders, and 148 member societies. For more information, visit www.cfainstitute.org.

• Part I Learning Objectives, Summary Overview, and Problems 1Chapter 1 Professionalism in the Investment Management 3Learning Outcomes 3Summary 3Practice Problems 4Chapter 2 Fintech in Investment Management 5Learning Outcomes 5Summary 5Practice Problems 6Chapter 3 Capital Market Expectations, Part 1: Framework and Macro Considerations 9Learning Outcomes 9Summary 10Practice Problem 13Chapter 4 Capital Market Expectations, Part 2: Forecasting Asset Class Returns 21Learning Outcomes 21Summary 22Practice Problems 25Chapter 5 Overview of Asset Allocation 35Learning Outcomes 35Summary 35Practice Problems 37Chapter 6 Principles of Asset Allocation 39Learning Outcomes 39Summary 40Practice Problems 41Chapter 7 Asset Allocation with Real-World Constraints 51Learning Outcomes 51Summary 51Practice Problems 53Chapter 8 Currency Management: An Introduction 63Learning Outcomes 63Summary 63Practice Problems 66Chapter 9 Overview of Fixed-Income Portfolio Management 79Learning Outcomes 79Summary 79Practice Problems 81Chapter 10 Liability-Driven and Index-Based Strategies 87Learning Outcomes 87Summary 87Practice Problems 91Chapter 11 Overview of Equity Portfolio Management 101Learning Outcomes 101Summary 101Practice Problems 102Chapter 12 Passive Equity Investing 105Learning Outcomes 105Summary 105Practice Problems 107Chapter 13 Active Equity Investing: Strategies 113Learning Outcomes 113Summary 113Practice Problems 115Chapter 14 Hedge Fund Strategies 121Learning Outcomes 121Summary 121Practice Problems 124Chapter 15 Overview of Private Wealth Management 131Learning Outcomes 131Summary 131Practice Problems 133Chapter 16 Topics in Private Wealth Management 141Learning Outcomes 141Summary 141Practice Problems 144Chapter 17 Portfolio Management for Institutional Investors 151Learning Outcomes 151Summary 152Practice Problems 155Chapter 18 Trade Strategy and Execution 163Learning Outcomes 163Summary 163Practice Problems 165Chapter 19 Portfolio Performance Evaluation 175Learning Outcomes 175Summary 176Practice Problems 177Chapter 20 Investment Manager Selection 181Learning Outcomes 181Summary 181Practice Problems 183Part II Solutions 199Chapter 1 Professionalism in the Investment Management 201Solutions 201Chapter 2 Fintech in Investment Management 203Solutions 203Chapter 3 Capital Market Expectations, Part I: Framework and Macro Considerations 205Solutions 205Chapter 4 Capital Market Expectations, Part II: Forecasting Asset Class Returns 211Solutions 211Chapter 5 Overview of Asset Allocation 219Solutions 219Chapter 6 Principles of Asset Allocation 221Solutions 221Chapter 7 Asset Allocation with Real-World Constraints 229Solutions 229Chapter 8 Currency Management: An Introduction 235Solutions 235Chapter 9 Overview of Fixed-Income Portfolio Management 249Solutions 249Chapter 10 Liability-Driven and Index-Based Strategies 253Solutions 253Chapter 11 Overview of Equity Portfolio Management 259Solutions 259Chapter 12 Passive Equity Investing 263Solutions 263Chapter 13 Active Equity Investing: Strategies 267Solutions 267Chapter 14 Hedge Fund Strategies 273Solutions 273Chapter 15 Overview of Private Wealth Management 283Solutions 283Chapter 16 Topics in Private Wealth Management 291Solutions 291Chapter 17 Portfolio Management for Institutional Investors 299Solutions 299Chapter 18 Trade Strategy and Execution 305Solutions 305Chapter 19 Portfolio Performance Evaluation 315Solutions 315Chapter 20 Investment Manager Selection 319Solutions 319About the CFA Program 333