When it comes to an institutional IPS (and I supposed individual IPS) question regarding liquidity and distinguishing between low, moderate, and high, is there a rule of thumb on where those cutoffs are from a percentage standpoint? For example, when the liquidity requirement was 4.5% of the portfolio, I called that moderate, but Schweser called it low…
Thanks!
As far as I know, there is no law of physics that characterizes a 4.5% liquidity requirement specifically as low or moderate or high.
Don’t fret it.
instead of using low, medium or high, use the numbers or percentages.
Those are the sorts of questions that make me a bit uncomfortable in my practice questions. It’s difficult to contextualize the 4.5% here given the lack of the rest of the question, but generally I’ve run into the same problem where my assessment of low or moderate or high has disagreed with Schweser. I don’t know how strict CFAI is with assessment of such a question, but I’d hope that identifying the 4.5% is sufficient.