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The 5 Investment Policy Statement (IPS) Constraints

Time, taxes, liquidity, legal, and unique. The 5 IPS constraints are heavily tested on the L3 exam. Here's what you need to know about each.

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How the CFA L3 Tests Return Objectives and Calculations

Return objectives and required return are always on the L3 exam...and always a reason Candidates get tripped up. Here's what to know to get prepared.

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No Surprise - CFA L3 IPS Exam Questions Follow a Typical Format

The Individual investment policy statement (IPS) gets tested in essentially the same way every year on the CFA Level 3 exam. There are no excuses for not knowing what to expect.

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Determining an Investor's Willingness and Ability to take Risk

A post on how to identify the ability and willingness of an investor to take risk (a guaranteed CFA L3 exam question). 

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Linking Behavioral Finance to the Individual IPS

Coverage of the last behavioral finance reading on the CFA L3 exam. Introduces the Barnwell 2-way, Pompian, and BB&K models for classifying investors in terms of risk tolerance and how this ties into IPS questions. 

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Individual Behavioral Biases by Investor Type

An overview of which behavioral biases, both cognitive and emotional, get exhibited by investor type. 

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The 6 Testable Emotional Biases on CFA L3

Emotional biases are those that arise from impulse, intuition, feelings, and they result in sort of personal and perhaps un-rational decision making. There are 6 biases that get tested on the CFA Level 3 exam.

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The 4 Information Processing Errors Explained

A breakdown of information processing erorrs, constituting half of the cognitive biases introduced in CFA L3's behavioral finance section.

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The 5 Belief Perseverance Errors - Cognitive Biases

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Understanding Individual Behavioral Biases for the CFA L3 Exam

Behavioral finance is worth 10% of the total points on the CFA Exam, and individual biases make up a significant part of that. Knowing the emotional and cognitive errors is critical. Here's how they get tested.

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