CFA Society Hong Kong (also known as The Hong Kong Society of Financial Analysts Limited ) is a non-profit organization founded in 1992 by a group of CFA charterholders in Hong Kong. The Society has over 6,800 members (as of 31 Mar 2020) and is one of the largest member societies of CFA Institute which has more than 154,000 members in 165+ countries/territories. The Society is mostly run by member volunteers with the support of a team of professional staff.
CFA Society Hong Kong shares the mission of CFA Institute in raising professional and ethical standard of financial analysts and investment practitioners through our continuing education events and advocacy effort. In addition to promoting the CFA designation in Hong Kong, the Society aims to provide a forum for our members, CFA Institute, other investment practitioners and regulators.
I m not sure u if in a question asking to justify ur choice, you should say why the other 2 options are not correct. This is controversial, some say you should only focus on why A for example is correct, and not why B, and C are not correct when u justify...What do you guys think/know on that please?
Hello! You definitely need to focus on why portfolio A is correct like you mentioned. However, when you have an option to select 1 of 3 portfolios, sometimes your sentence should be written in a way to implicitly show why other portfolios are not selected. For example when you say portfolio X is the one that satisfies both conditions of matching the Macaulay duration of the liability AND having a present value equal or larger than the present value of the liability, you are also saying that the other 2 portfolios do not meet these conditions. So yes you need to focus on the portfolio you pick, however, in other cases where more than 1 portfolio can satisfy the conditions, it is inevitable, you need to show why a given option is superior to the other and hence, there is a comparison that is done. What would be completely wrong is to say Portfolio B and C do not meet the conditions so I pick portfolio A! Obviously, portfolios B and C being inadequate, doesn't mean portfolio A is good! You need to state why portfolio A is the chosen one, and ensure it is clear that it is the best one in case other portfolios would also do the job but to a lesser extent. Hope that helps!
