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Create an Investment Policy Statement Based on the CFA Framework

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Create an Investment Policy Statement based on the CFA framework.

Utilize the following Morningstar steps: http://news.morningstar.com/classroom2/course.asp?docId=4439&page=1&CN=.

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Solution Summary

The solution assists in creating an investment policy statement based on the CFA framework.

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See attached file for proper format of the table.

Executive summary

The ABC mutual fund was established to ABC Company with financial support. The investment policy plan is intended to meet Section 401 (a) requirements provided by the Internal Revenue Code. The Investment Policy Statement purpose is to assist in making investment plan decisions by identifying investment objectives, decision making process in investment selection, and instruments to be used in assessing investment performance. Accountability standards are provided to monitor progress of the investment portfolio and evaluate responsibilities.

Investment objectives

? Achieve competitive long term rate of return that is 4% more compared to rate of inflation
? To preserve long term asset purchasing power while maintaining growth in annual distributions for the company
? Maintain wide range of investment portfolio at reasonable risk levels
? Control costs incurred in administering and managing the investment plan.

Investment philosophy

The general philosophy for the investment plan provides that investment options to be included should promote diversification by investing in different asset classes in order to achieve a wide range of investment opportunities. The investment plan shall aim to maximize returns at reasonable risk ...

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