Next, Standish begins to identify specific assets to include in the developed markets portfolio. He considers equally weighted positions in Chilean Real Estate, Swiss bonds, and US equities, among others. He reviews the forecasts of inflation for these three countries and notes that inflation is predicted to be above expected levels in Chile, but below expectations in both Switzerland and the United States. With this new information, he ponders how he should adjust the portfolio weights to reflect
the economic forecast.
27 When considering the proposed weights for the developed markets portfolio, the most appropriate adjustment for Standish to make is to reduce the asset
A the United States. B Switzerland. C Chile.
KEY = B
B is correct: With above- average inflation, Chilean real estate is expected to outper-form. Below- average inflation would likely cause US equities to outperform and have a neutral effect on Swiss bonds. Therefore, Standish should reduce the weight in Swiss bonds relative to the other two assets.
何老师在讲Mock时选了A，这里何老师是不是选错了，equity在below expaction inflation时应该outperform吗，bond的表现不是neutral.
