Reference no: EM1334624
Explain Investment Vehicles and Techniques
Randy has just been hired as the chief investment officer of a large regional bank. As part of his new role, he has been asked to identify some different investment techniques and strategies that the bank could use to lure in new customers in the current market. The current market is one where interest rates are falling, and the stock market has been seeing a positive trend moving upward for some time. The bank's typical customer mix falls in the 45-65 age range.
Taking the customer mix, current market trends, and Randy's task at hand, describe what investment vehicles and techniques you might use to develop an ideal investment pool in which to target the bank's customer base of potential investors?
- Please indicate what type of risk and return you would expect to make, given the trends in the market and interest rate situation with this asset pool.
- What type of asset mix would you build, given this scenario?
- How would your asset mix change if interest rates started to rise? Why?
- How would your asset mix change if the stock market began to decline? Why?