Past Paper Summary AF4
October 2023
March 2023
September 2022
1
• Explain MPT 5
• Assumptions of MPT 5
• Benefits of diversification in
investment portfolio 4
• Standard deviation 4
• Standard deviation (c) 9
• Risk of an investment plus
reasons 12
• CPI vs RPI 5
• Broad vs narrow money 4
• Consequences of sustained
UK money supply 3
• Roe (c) 9
• Drawbacks of using ROE 3
• Non-financial factors that can
affect ATR 5
• Ways to mitigate CFL 4
• Identify client biases 4
• Tax benefits of EIS 4
• Income tax allowances (c) 6
• Risks and reasoning for global
emerging markets (12)
• Index linked cert maturity
options 3
• How index linked maturity value
calculated 4
• Benefits of NS&I 4
• Tax on NS&I Green savings
bonds 3
• Max extra into NS&I (c) 5
• Value based style explained 7
• TWR (c) 9
• Why TWR rather than MWR 3
• Functions of ACD 4
• Functions of Depositary 4
• Tax on SEIS and VCT divis 3
• Dividend calculations (C) 7
• SEIS reinvestment relief 3
• CGT relief on SEIS 4
• CAPM (c) 6
• Relate CAPM to ATR and
objectives 3
• 2 x principles of CAPM 2
• 4 benefits and 4 drawbacks of
using CAPM 8
• Explain Macaulay 5
• What is measured by modified
duration 3
• Factors affecting Macaulay
comparisons 3
• State 3 IA sectors as suitable FI
benchmarks 3
• Factors that increase interest
rates 5
• Alpha rationale 5
• Correlation and impact 5
• Passive ETF risks 6
• Fund related active fund factors 6
• Capital and current account in
deficit 5
• PAIF conditions 7
• Herding and endowment 6
2
Alpha (c) 6
Interpret alpha information 4
Objective of gearing 3
Possible consequences of gearing
4
Discount explained for Inv Trust 3
Reasons for a discount being
present 5
Income options identified 3
Tactical vs strategic 4
Factors impacting income
requirements 3
Actions against sequencing risk 5
• Information ratio (c) 7
• Interpret IR 4
• Onshore bond segmentation
benefits 5
• Explain regular withdrawal
option of bond 6
• Explain top slicing relief 4
• Fund of fund vs manager of
manager 4
• UK current account 4
• UK capital account 3
• How to balance out a deficit in
current account 3
• Thematic based investment
benefits 3
• Reasons for a fall in investment
value 5
• Compound return © 5
• Types of socially responsible
investments 4
• Examples of ESG 6
• Sharpe ration (c) 5
• Benefits and drawbacks of using
sharpe 4
• Volatility managed fund (VMF) 3
• Suitability of VMF 3
3
• Redemption yield (c) 7
• Compare two Gilts 6
• Gilts collective vs directly
owned 3
• Reasons why IL Gilt prices
may fall 3
• Effect of increasing interest
rates on gilts 4
• Quantitative tightening (QT) 3
• Consequences of QT 3
• Factors the lead to gilt yield
curve steepening 4
• Investor protection for Gilt
purchase 4
• Dividend cover (c) 6
• Comment on dividend cover 4
• Dividend yield 8
• Limitations of using div cover
and div yield 6
• Factors that can affect a share
price 8
• Investor bias of anchoring 2
• Investor bias of mental
accounting 2
• Direct equities vs collectives 3
• Objectives of rebalancing 6
• Benefits of using platform 5
• ROCE (c) 7
• Comment on ROCE figures 3
• Drawbacks of ROCE 3
• Interim vs final dividend 4
• Dividends vs bonus 3
• EIS using reinvestment relief (c) 7
• EIS tax benefits 8
