The Desirable Components of an Investment Policy Statement for Individual

question 70

Multiple Choice

The desirable components of an Investment Policy Statement for individual investors can be divided into

• A) three main elements consisting of scope and purpose, governance, and risk management.
• B) three main elements consisting of scope and purpose, governance, and investment, return-and-risk objectives.
• C) four main elements consisting of scope and purpose, governance, risk management, and feedback.
• D) four main elements consisting of scope and purpose, governance, risk management, and investment, return-and-risk objectives.
• E) five main elements consisting of scope and purpose, governance, risk management, investment, return-and-risk objectives, and evaluation.

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Definitions:

Control Process

The control process is an essential part of management that involves monitoring performance, comparing it with goals, and taking corrective action as needed.

Performance Objectives

Specific goals that individuals or teams strive to achieve, often set to measure and improve effectiveness and efficiency.

Corrective Action

Measures taken to rectify a problem, defect, or deficiency in a process or a product to ensure that it meets its specifications and requirements.

Relative Approach

A method of evaluation or judgment that is based on comparisons with other entities, situations, or standards, rather than absolute measures.