Volume 1: Asset Allocation
Learning Module 1: Capital Market Expectations, Part 1: Framework and Macro Considerations
Macroeconomic Linkages
This video covers the relationship between Net Exports, Net Private Savings, and Net Government Surplus.
Taylor Rule
The Taylor rule is used to estimate the target short-term policy rate for the Central Bank. It is important to identify if the question requires real or nominal target rate.
Learning Module 2: Capital Market Expectations, Part 2: Forecasting Asset Class Returns
Grinold-Kroner Model
This video covers the calculation of the required return on the equity market using the Grinold-Kroner model, and the sub-components of the model/
Singer-Terhaar Model
The Singer-Terhaar model is used to estimate the risk premium of an asset class considering that markets can be perfectly integrated with the Global Investable Market (GIM) or completely segmented.
Learning Module 3: Overview of Asset Allocation
Coming Soon!
Learning Module 4: Principles of Asset Allocation
The Hedging/Return-Seeking Approach
The Hedging/Return-Seeking approach is a liability-relative approach which uses two portfolios: one for hedging the liabilities, and one for enhancing returns to lower the cost of funding the liabilities. This further breaks down into the Basic approach and Variants approach.
Goals-Based Asset Allocation: Minimum Expectation Returns
In the goals-based asset allocation approach, the module selected is the one with the highest minimm expectation returns, which is based on the investor’s time horizon and probability of success. Then, you will need to how to calculate the required capital to be invested in the module today.
Goals-Based Asset Allocation: Present Value of a Growing Annuity
In the goals-based asset allocation approach, when the a