Practice Test Geeks(AAMS) Accredited Asset Management Specialist Practice Test
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Asset Management Process Flashcards

7 cards from real AAMS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Asset Management Process flashcards as text

  1. A manager shifts portfolio weights away from the strategic allocation to exploit a short-term market opportunity. This is best described as:

    Answer: Tactical asset allocation

    Tactical asset allocation involves temporary deviations from the strategic mix to capitalize on market conditions.

  2. Which of the following is NOT typically included in an Investment Policy Statement?

    Answer: Names of specific securities to hold

    An IPS establishes guidelines and objectives but does not name specific securities, which are selected during implementation.

  3. A client's portfolio underperforms its benchmark by 2%. The manager should first:

    Answer: Analyze the sources of the performance gap

    Performance attribution analysis identifies whether underperformance is due to asset allocation, security selection, or market conditions.

  4. The process of gathering financial data, identifying goals, and understanding a client's current situation occurs during which phase?

    Answer: Data collection and goal setting

    Data collection and goal setting is the foundational phase where the manager learns about the client's financial situation and objectives.

  5. A pension fund's asset allocation is driven primarily by its future benefit payment obligations. This approach is called:

    Answer: Liability-driven investing (LDI)

    Liability-driven investing structures the portfolio to match assets against future liabilities, commonly used by pension funds.

  6. Which of the following best describes 'monitoring' in the asset management process?

    Answer: Ongoing review of the portfolio, client circumstances, and market conditions

    Monitoring is a continuous process of reviewing whether the portfolio still aligns with the client's objectives and constraints.

  7. A client receives a large inheritance and tells her advisor. In the asset management process, this information triggers:

    Answer: A review and potential update of the IPS

    A material change in client circumstances should prompt a review and possible revision of the IPS to reflect the new financial situation.