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  #21  
Old 08-15-2017, 09:10 PM
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Thanks a lot!
I got the point
But don't forget to diversify something. Could you please explain more about diversify?
If you have a stock portfolio 100% invested in AAPL, how likely are you to beat the market for the next 40 years?
If you diversify your portfolio across many industries, how likely are you to beat the market over the next 40 years?

If you can think of a way to apply that to the recommendation for the client, then do so. Don't you think a diverse portfolio withstands external forces better than one invested in a single asset?
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  #22  
Old 08-15-2017, 09:36 PM
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If you have a stock portfolio 100% invested in AAPL, how likely are you to beat the market for the next 40 years?
If you diversify your portfolio across many industries, how likely are you to beat the market over the next 40 years?

If you can think of a way to apply that to the recommendation for the client, then do so. Don't you think a diverse portfolio withstands external forces better than one invested in a single asset?

I got the point!
Thanks a lot!
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  #23  
Old 08-17-2017, 08:29 PM
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Hi, everybody!

Still confused about the assignment:
Identify and categorize the external forces that might have the greatest influence on the model's key parameters(SSx,CEx).
Does it means that I should find out several external forces affect both on SSx and CEx?
Or should I find out several external forces affect SSx and CEx respectively?

I do realize that material provided has identify 8 external forces on sovereign rating, Meanwhile some of them may have impact on inflation, I think I should pick up some of external from the 8 listed external forces and they may affect SS and CE simultaneously.
Am I Correct?

Many thanks!!
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  #24  
Old 08-17-2017, 08:30 PM
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pretty sure it's respectively. doesn't have to be simultaneously, but can be.
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  #25  
Old 08-17-2017, 09:04 PM
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pretty sure it's respectively. doesn't have to be simultaneously, but can be.
Thanks for quick reply

external forces about SSx have been given by the material,
but external forces about CEx? Should I identify it by myself?

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  #26  
Old 08-17-2017, 09:09 PM
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Thanks for quick reply

external forces about SSx have been given by the material,
but external forces about CEx? Should I identify it by myself?

that's what I did. took the 8 external forces from that article for SSx and came up with others for CEx.

I also added lots of other external forces. I went overboard which is why mine was so long.
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  #27  
Old 08-17-2017, 09:16 PM
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that's what I did. took the 8 external forces from that article for SSx and came up with others for CEx.

I also added lots of other external forces. I went overboard which is why mine was so long.

Wow! I suppose to pick 3~4 external forces from the article, since it may save some words to explain.
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  #28  
Old 08-18-2017, 05:10 AM
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Wow! I suppose to pick 3~4 external forces from the article, since it may save some words to explain.
May I ask one more question?

The exercise material indicate that inflation in CountryX may affect CEx.
Should I identify external forces that may influence on CEx and inflation is one of external forces, Or should I identify external forces that may influence on inflation?

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  #29  
Old 08-18-2017, 09:27 AM
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Originally Posted by yyConsultant View Post
May I ask one more question?

The exercise material indicate that inflation in CountryX may affect CEx.
Should I identify external forces that may influence on CEx and inflation is one of external forces, Or should I identify external forces that may influence on inflation?

Many thanks
i used inflation as an external force for CEx. Also identified things that effect inflation. I too was confused as to whether inflation was the external force or it was something else that effects inflation that was the external force, thus identifying a lot of things. I don't know if i passed yet or not though since I just submitted last week.
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  #30  
Old 08-19-2017, 08:52 AM
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i used inflation as an external force for CEx. Also identified things that effect inflation. I too was confused as to whether inflation was the external force or it was something else that effects inflation that was the external force, thus identifying a lot of things. I don't know if i passed yet or not though since I just submitted last week.
Finally, I find out external forces on currency exchange risk and inflation is one of them are correct.
I suppose to figure out some external forces on currency exchange risk.
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