The Scope and Purpose Section of an Investment Policy Statement

question 24

Multiple Choice

The scope and purpose section of an Investment Policy Statement for individual investors typically consists of defining the

• A) return, distribution, and risk requirements.
• B) process for review of the IPS.
• C) appropriate metrics for risk measurement.
• D) relevant constraints.
• E) context, investor, and structure.

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Definitions:

ABA Code

A nine-digit identification number assigned to banks in the United States by the American Bankers Association, used for routing checks and electronic payments.

Federal Reserve District

One of the twelve regions established by the Federal Reserve Act, each with a Federal Reserve Bank, to regulate and oversee banking operations in the United States.

Routing Number

A unique nine-digit code used to identify a banking institution in the United States, essential for processing electronic transfers and checks.

Internal Control

A system of policies and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.