Vincenzo Dobadoni Investment Profile (adapted from 1998 CFA level III exam) 1. Underline the word at right
Question:
Vincenzo Dobadoni Investment Profile (adapted from 1998 CFA level III exam)
1. Underline the word at right that best describes the client’s.
2. Discuss appropriate client objectives:
A. Risk
B. Return
Transcribed Image Text:
Case Facts Type of investor Individual; 56-year-old male in good health 130 mion Swiss firancs (CHF Leave a trust fund of CHF 15.0 million for Asset base Stated retum desire or investment goal three children Annual spending needs Annual income from other sources (after tax) CHF 250,000 rising with inflation CHF 125,000 consulting income for next twoyears only Ability to generate additionalNo ncome Impulsive, opinionated, successful, with large bets as a businessman, believes success depends on taking initiative CHF 1.5 milion immediately torenovate requirements house Willingness to accept nsk Specific liquidity requremnts CHF 2.0 milion in taxes due in nine months Time specifications Legal and regulatory factors Unique circumstances Long-tem except for liquidity concems None one A Willingness to accept risk B Ability to accept risk C Risk tolerance Below average Below average Below average Significant Single stage Short to Above average Above Average Above Average Not significant E. Time horizon F. Overall time horizon Long term term
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1 Underline the word at right that best describes the clients 2 Discuss appropriate client objectives A Risk Stephenson has an aboveaverage risk tolerance based on both his ability and willingness to assume aboveaverage risk His large asset base long time horizon ample income to cover expenses and lack of need for liquidity or cash flow indicate an above average ability to assume risk His concentration in US smallcapitalization stocks and his desire for high returns indicate substantial willingness to assume risk B Return Stephensons financial circumstances long time horizon sizable asset base ample income and low liquidity needs and his risk tolerance warrant an aboveaverage total return objective ...View the full answer
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