CFA Level I · CFA Level I Exam · Portfolio Management: An Overview
In the portfolio management process, the step that compares the portfolio's results with the benchmark and the client's objectives, and may lead to changes in the investment policy statement, is best described as:
Monitoring and performance feedback is the step that compares portfolio results with the benchmark and client objectives and may trigger changes to the investment policy statement. Rebalancing is only an action that can follow, and implementation concerns building the portfolio rather than reviewing it.
- Arebalancing the portfolio
- Bmonitoring and performance feedbackCorrect
- Casset allocation implementation
Explanation
The feedback step covers monitoring the portfolio and the client's circumstances, evaluating performance against the benchmark and objectives, and updating the plan when needed. Rebalancing is one possible action that follows from monitoring, not the evaluation itself.
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