Portfolio Management Q131

131Which of the following is the most appropriate reason for a written investment policy statement? A written IPS:

A
provides investment managers with a ready protection against client lawsuits.
B
communicates a plan for trying to accomplish investment success.
C
allows investment managers to educate clients about the correct use and purpose of investments.

Option : B
Explanation : A written IPS is best seen as a communication instrument allowing clients and portfolio managers to mutually establish investment objectives and constraints.

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