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Question 1
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?
Correct Answer:
The long-term benchmark mix of asset classes set to meet the fund's objectives and risk tolerance over the planning horizon
Question 2
An investment manager compares public and private market assets for a long-term institutional client. Which feature is most characteristic of private market assets such as private equity and direct infrastructure?
Correct Answer:
Illiquidity, appraisal-based valuations, and a return premium expected for accepting reduced liquidity
Question 3
A CIO is reviewing the efficient frontier from a mean-variance optimisation. A key practical criticism of using unconstrained mean-variance optimisation directly for strategic asset allocation is that it:
Correct Answer:
Is highly sensitive to small changes in expected return inputs, producing extreme, unstable, error-maximising weights
Question 4
Under the efficient market hypothesis, which form asserts that all publicly available information, including past prices and published financial statements, is already reflected in security prices?
Correct Answer:
Semi-strong form
Question 5
An equity portfolio has a beta of 1.20. The risk-free rate is 3% and the expected market return is 8%. Using the CAPM, what is the portfolio's expected return?
Correct Answer:
9.0%
Question 1
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About this Exam

Prepare with the IFoA SA7 Practice Questions - IFoA SA7 Investment and Finance Specialist Advanced Exam practice quiz. This question bank includes 100 questions covering risk, portfolio, investment, equity, and asset. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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

This practice set contains 100 questions from the matching question bank and focuses on risk, portfolio, investment, equity, and asset. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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