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Jim Dobbs

      The Investment Advisor Body of Knowledge

The Investment Advisor Body of KnowledgeReadings for the CIMA® CertificationIMCA® INVESTMENT MANAGEMENT CONSULTANTS ASSOCIATION

      Cover image: © iStock.com / TarapongS

      Cover design: Wiley

      Copyright © 2015 by Investment Management Consultants Association. All rights reserved.

      Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

      Published simultaneously in Canada.

      Excerpts from the following were reprinted with permission:

      ActiveBeta Indexes: Capturing Systematic Sources of Active Equity Returns by Khalid Ghayur, Ronan G. Heaney, Stephen A. Komon, Stephen C. Platt, and Andrew W. Lo. Copyright © 2010 by Khalid Ghayur, Ronan G. Heaney, Stephen A. Komon, and Stephen C. Platt. Reproduced with permission of John Wiley & Sons, Inc.

      Behavioral Finance and Wealth Management: How to Build Optimal Portfolios That Account for Investor Biases, Second Edition by Michael Pompian. Copyright © 2012 by Michael M. Pompian. Reproduced with permission of John Wiley & Sons, Inc.

      “Dynamic Risk-Based Asset Allocation” by Kris Boudt, Joakim Darras, and Benedict Peeters. Copyright © 2013 by Wilmott Magazine Ltd. Reproduced with permission.

      Financial Advice and Investment Decisions: A Manifesto for Change by Jarrod W. Wilcox and Frank J. Fabozzi. Copyright © 2013 by John Wiley & Sons, Inc. Reproduced with permission of John Wiley & Sons, Inc.

(Credits continued on page 1135)

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      ISBN 978-1-118-91232-4 (Paperback)

      ISBN 978-1-118-91241-6 (ePDF)

      ISBN 978-1-118-91234-8 (ePub)

Dedicated to My Family:Sandi, Tyler, Erika, Dylan, and DrewMom and Dad: Sue and CurtBrothers: Mike and Ken

      Acknowledgments

      IMCA Board of Directors

      John Nersesian, CIMA, CFP, CPWA (Chair)

      Scott Thayer, CIMA (Vice Chair)

      Kevin Sanchez, CIMA, CFP, CPWA (Treasurer)

      David Koulish, CPWA, CFP (Secretary)

      Betsy Piper/Bach, JD, CIMA, CFP, CTFA (Past Chair)

      David Archer, CIMA, AIFA

      Dorothy Bossung, CIMA, CFP, CPWA

      Bruce Curwood, CIMA, CFA

      Tony Davidow, CIMA

      Stewart Koesten, CIMA, CFP, AIF

      John Moninger, CIMA, CPWA, AIF

      Margaret Towle, PhD, CIMA, CPWA

      Brett Wright, CIMA, CPWA

      Keith Clemens, CIMA, CPWA

      Todd Wagenberg, CIMA

      CIMA Certification Commission

      Jay Shein, PhD, CIMA, CFP (Chair)

      David Archer, CIMA, AIFA

      Lewis Assaley, PhD, CIMA

      David Cordell, PhD, CFP, CFA

      Alfred Eaton, CIMA, CFP

      Phil Fazio, DBA, CFP, CIMA

      Todd Wagenberg, CIMA

      Ellen Walsh, CIMA

      Deidre Spurlin Waltz, CIMA, CPWA, CFP

      Frederick Weiss, CIMA

      Grace Wellerts, CIMA, CFP

      IMCA Technical Advisory Board

      Bruce Curwood, CIMA, CFA

      Phil Fazio, DBA, CFP, CIMA

      Jonathan Golub, CFA

      Nigel Lewis, PhD

      Rex Macey, CIMA, CFA, CFP

      Ash Rajan, MBA

      Jay Shein, PhD, CIMA, CFP

      Scott Thayer, CIMA

      Margaret Towle, PhD, CIMA, CPWA

      IMCA Staff

      Sean Walters, CAE (Executive Director)

      Ian MacKenzie (Chief Operations Officer)

      Gary Diffendaffer, CFP (Chief Certification Officer)

      Theresa Bartlett (Director of Certification)

      Angie Lutterman, CPA (Chief Financial Officer)

      Ceil Oetting, PHR (Senior Director, Human Resources)

      Stephanie Lasser, CAE, CMP (Director of Education and Conferences)

      Jamie Lewis (Education & Product Development Manager)

      Cheryl Brandes (Education Programs Manager)

      Tricia Fleming (Education Programs Coordinator and Administrator)

      Jill Ladouceur (Director of Creative Services)

      Ryan Hoffman (Director of Communications)

      Debbie Nochlin (Managing Editor, Investments & Wealth Monitor and Journal of Investment Consulting)

      A special thanks goes to Jamie Lewis for organizing and managing this project. Your patience and persistence were critical. This would never have come together without your tireless work. Thank you, Jamie!

      Contributing Authors

      M.J. Alhabeeb, PhD

      Noel Amenc, PhD

      Howard J. Atkinson, CIMA, CFA

      Mark

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