Zubov topic test:
I do not agree with the following answer:
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I think that the risk tolerance is high. What do others think?
i didn’t do this question, but anything that is funding someones salary is gonna be low tolerance.
but it’s paying only 25% of the operating budget???!!
‘only’ is a word which you slipped in there. the question says 'significant’
I just did a CFAI mock and one of the questions had an endowment with a similar situation (where the endownment was responsible for funding 75% of an operating budget). The answer was high risk tolerance because endowments have long time horizons and are able to replenish through donations. It was the CFA 2016 AM mock pdf found in candidate resources. Question 46.
hat’s what I mean. How would you know what the answer is? This is very subjective.
Read the question. A financial adviser doesn’t say this is subjective in the real world.