CFA Level I · CFA Level I Exam · Portfolio Management: An Overview
Which feature most likely distinguishes a separately managed account from a pooled investment product?
A separately managed account is customized to the individual client's objectives and constraints, whereas pooled products combine many investors' money in a single shared portfolio with a common strategy. Exchange trading of shares is a feature of ETFs, not of separate accounts.
- AInvestors share one portfolio and a common strategy with all other investors
- BThe portfolio is customized to the individual client's objectives and constraintsCorrect
- CShares are traded at a market price on an exchange throughout the day
Explanation
A separately managed account holds assets in the client's name and can be tailored to that client's needs. Pooled products combine investors' money in a shared portfolio.
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