SECTIONS
SECTION V
Workshop for the
Practictioner Summaries
The Future of Investment Management
This session from the Research Foundation Workshop for the Practitioner covers: Investment management is in flux, arguably more than it has been in a long time; This changing landscape includes seven key trends
that are affecting the future of investment management; We are evolving toward a world with three distinct types of products, each with their own challenges and requirements for success.
Popularity: A Bridge between Classical and Behavioral Finance
This session from the 72nd CFA Institute Annual Conference discusses
- “popularity,” or how much a security is liked, apart from the fundamentals: The more investors like it, the higher the price but the lower the expected return.
- a new approach to asset pricing: the popularity asset pricing model (PAPM), which builds on the CAPM but includes additional investor preferences beyond risk aversion, such as liquidity and brand preference. These specific preferences are aggregated into security prices and are not arbitraged away.
- that preferences can be rational (classical) or emotional (behavioral), so the PAPM provides a bridge between classical and behavioral finance.
Do you know....?
Eugene Fama’s approach to return decomposition in 1972 helped launch
YOU'RE RIGHT!
Answer: Performance attribution. Performance Attribution: History and Progress by Carl R. Bacon, CIPM, charts the development of attribution from its beginning with Fama decomposition in the 1970s, through its foundations in the 1980s, into its issues of multiperiod and multicurrency attribution in the 1990s, and ending on its more detailed models for fixed-income and risk-adjusted attribution in recent years.
VERY CLOSE!
Answer: Performance attribution. Performance Attribution: History and Progress by Carl R. Bacon, CIPM, charts the development of attribution from its beginning with Fama decomposition in the 1970s, through its foundations in the 1980s, into its issues of multiperiod and multicurrency attribution in the 1990s, and ending on its more detailed models for fixed-income and risk-adjusted attribution in recent years.
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