Course Hero Logo

Homework_AA Moodle.pdf - Pare[Type text] UNSW Business...

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 1 - 3 out of 4 pages.

Pare[Type text]FINS5568 Capstone – Portfolio Management ProcessPage 1FINS5568Capstone -Portfolio Management ProcessHomeworkforWeek 4 Class DiscussionofAsset AllocationUNSW Business SchoolHomework
Prepared by Henry Yip, UNSW Business School, UNSWFINS5568 Capstone – Portfolio Management ProcessPage 2This piece of homework has two questions and asks you to:1Evaluate the classification of asset classes2Select and justify the choice of asset classes3Compute risk adjusted returns to justify the choice of portfoliosQuestion 1William is a fund manager managing three portfolios. The expected return and risk of the threeportfolios over the next 10 years are shown in the table below.PortfolioExpected ReturnStandard Deviation of ReturnA11.5%20%B8C6Three of William’s clients, Irene, Peter and Ray, completed an investor profile questionnairethat studied the extent of investment risk tolerance. The scores were 25, 50 and 90 out of themaximum 100, respectively. On a scale of 10, William assigned Irene, Peter and Ray 8, 5, and 1units of risk aversion (A), respectively.Another client, Jennifer, specifically indicated to William that she wanted to earn at least 5%per annum over next 10 years.A fifth client, Jack, learnt from William that the three portfolios are all made up of three assetclasses – Australian equities, developed market equities, and Australian corporate bonds.Part Ai.Among Irene, Peter and Ray, who could tolerate risk the least and why?1310

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 4 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Two
Professor
N/A
Tags

Newly uploaded documents

Show More

Newly uploaded documents

Show More

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture