CIPM Principals 2013 Reding5 Flashcards

Terms Definitions
5a Explain the purpose of return attribution and its rolein the investment decision process
Purpose is used to identify the source of exess returns, that are used to evaluate how investment decisions are used to add or subtract value
5b Distinguish between return attribution adn return contribution.
Identifies contibution of a portfolio to the total return of the portfolio. NOT calculated relative to the benchmark.
5c Distinguish between return attribution and risk attribution
Risk attribution analyzes the risk consequenses of investment decisions.
5d Describe the attributes of an effective attribution process.
reconcile the total portfolio return.
reflect the investment decision process
quantify the active decision of the portfolio manager
provide a complete understanding of the exess return of the portfolio.
5e Analyze hte sources of performance of a portfolio using the BHB and BF models
allocation and selection
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