knowledge topics
Limited Partnerships
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Define a limited partnership.
- Explain how each of the factors may impact the suitability of a limited partnership, such as:
- Time horizon
- Volatility
- Risk tolerance
- Investment objective
- Financial situation
- Personal situation
- Income
- Liquidity
- Control
- Tax impact
- Investment management process
- Economic cycle
- Cost
- Historical performance
- Performance expectations
- Evaluate how each of the factors may impact the suitability of a limited partnership.
- Explain for whom a limited partnership may be suitable.
- Identify that a limited partnership can invest in different types of assets or projects.
- Identify that the risks associated with a limited partnership need to be assessed on a per case basis.
- Identify that investors in a limited partnership cannot participate in the day-to-day operations of the partnership.
- Identify that holding periods may exist when investing in limited partnerships.
- Explain how income earned by a limited partnership is handled when distributed to unitholders of the limited partnership.
- Identify factors that may affect the risk of a limited partnership, such as:
- The risk of the underlying assets that the limited partnership is invested in
- The management of the limited partnership
- Identify the potential tax consequences of a limited partnership.
Glossary of Verbs (mouse over to see definition)
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
Read more about the Taxonomy used in the FP-BoK
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