GFOA CPFO Exam - Topic 5 Question 14 Discussion

Actual exam question for GFOA's CPFO exam

Question #: 14
Topic #: 5

[All CPFO Questions]

Which of the following is not included in general guidelines for a diversified investment portfolio?

ADo not over-concentrate securities from a specific issue or business sector

BInvest in securities that have varying maturities

CLimited investment in securities with higher credit risk

Dnever invest in readily liquid securities

Show Suggested Answer

Suggested Answer: D

by Garry at May 09, 2022, 07:08 PM

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Vincent

5 months ago

A is super important, don’t put all your eggs in one basket!

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Cherry

6 months ago

C seems a bit too cautious for my taste.

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Katie

6 months ago

I thought liquid securities were usually safer?

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Cora

6 months ago

Totally agree, D makes no sense at all!

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Geoffrey

6 months ago

D is definitely not a good guideline.

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Frank

6 months ago

I vaguely recall a practice question about credit risk, and I think limiting that is a good guideline. Could it be C?

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Lorrie

6 months ago

I feel like we discussed the importance of not over-concentrating in one sector, so maybe that's not the answer?

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Sarina

6 months ago

I think option D sounds off, but I'm not completely sure. I remember something about liquidity being important.

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Sommer

6 months ago

I'm leaning towards D as well, but I can't quite remember if we covered anything about liquid securities specifically.

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Leonida

6 months ago

Hmm, I'm a bit unsure about this one. Let me think it through carefully. I know there are different ways to count activity, but I can't quite recall the specific options.

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Detra

6 months ago

This seems like a tricky question. I'll need to think carefully about the different ways that internal controls can be overcome.

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Coral

7 months ago

Hmm, this seems like it could be a tricky one. I'll need to carefully read through the answer choices and think about the typical services and resources a small branch would require.

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