Purpose of an Investment Policy Statement

Very Easy Investment Policy And Allocation Investment Policy Statement

In the context of portfolio management, an Investment Policy Statement (IPS) serves as a critical document. It outlines the guidelines and parameters for managing an investment portfolio. Understanding its components can significantly enhance the investment process. Which of the following best describes the primary purpose of an IPS?

To provide a detailed asset allocation strategy without considering the investor's goals.

To outline the investor's goals, constraints, and investment strategy.

To select individual securities for the portfolio based purely on past performance.

Hint

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