IFoA SA7 Practice Questions - IFoA SA7 Investment And Finance Specialist Advanced Exam

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Within the SA7 framework for investment management, a Chief Investment Officer distinguishes the strategic asset allocation (SAA) from the tactical asset allocation (TAA). Which statement best characterises the SAA?

The long-term benchmark mix of asset classes set to meet the fund's objectives and risk tolerance over the planning horizon Short-term deviations from benchmark weights to exploit perceived mispricing between asset classes The selection of individual securities within an equity portfolio to outperform a sector index The daily rebalancing of cash to keep the portfolio fully invested at all times

Correct Answer:

The long-term benchmark mix of asset classes set to meet the fund's objectives and risk tolerance over the planning horizon

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