Portfolio Management in Practice, Volume 2

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 I Basics of Portfolio Planning and Construction 3Learning Outcomes 3Summary 3Practice Problems 5Chapter 2 Security Market Indexes 9Learning Outcomes 9Summary 9Practice Problems 10Chapter 3 Capital Market Expectations, Part 1: Framework and Macro Considerations 17Learning Outcomes 17Summary 18Practice Problems 21Chapter 4 Capital Market Expectations, Part 2: Forecasting Asset Class Returns 27Learning Outcomes 27Summary 28Practice Problems 30Chapter 5 Overview of Asset Allocation 39Learning Outcomes 39Summary 40Practice Problems 41Chapter 6 Principles of Asset Allocation 45Learning Outcomes 45Summary 46Practice Problems 47Chapter 7 Asset Allocation with Real-World Constraints 57Learning Outcomes 57Summary 57Practice Problems 59Chapter 8 Asset Allocation to Alternative Investments 69Learning Outcomes 69Summary 69Practice Problems 72Chapter 9 Exchange-Traded Funds: Mechanics and Applications 81Learning Outcomes 81Summary 81Practice Problems 83Chapter 10 Case Study in Portfolio Management: Institutional 89Learning Outcomes 89Summary 89Practice Problems 90Part II Solutions 95Chapter 1 Basics of Portfolio Planning and Construction 97Solutions 97Chapter 2 Security Market Indexes 101Solutions 101Chapter 3 Capital Market Expectations, Part I: Framework and Macro Considerations 105Solutions 105Chapter 4 Capital Market Expectations, Part II: Forecasting Asset Class Returns 111Solutions 111Chapter 5 Overview of Asset Allocation 119Solutions 119Chapter 6 Principles of Asset Allocation 121Solutions 121Chapter 7 Asset Allocation with Real-World Constraints 129Solutions 129Chapter 8 Asset Allocation to Alternative Investments 135Solutions 135Chapter 9 Exchange-Traded Funds: Mechanics and Applications 145Solutions 145Chapter 10 Case Study in Portfolio Management: Institutional 151Solutions 151About the CFA Program 157