Reference no: EM133377077
Question One
Write short notes on the following with examples from the investment markets:
a) Risky investments
b) Investment that requires passive management strategy
c) Financial assets that require active management strategy
Question Two
(i) Using the knowledge gained on alternative Sources of investments, choose investments that matches:
a)Risk averse investors with reasons
b)Risk seeker investors with reasons
Question Three
If you were to invest in East African community, discuss some of the factors that you think could hinder your decision
Question Four
Describe three examples of international bond investing that you would advise an investor to be aware of.
Question Five
If you form a portfolio of different investments, part of evaluation requires you to do "Portfolio re-balancing as a critical management process" Explain this.
Question Six
Investors are known in the way they manage the entire portfolio and not just single assets. A portfolio is a collection of several assets for diversification purposes. THE BEST DIVERSIFICATION IS TOWARDS THE ASSETS THAT ARE NEGATIVELY RELATED.
If we focus on the financial markets a simple way to know whether shares are negatively correlated or positively correlated is by looking at the sector of the economy every listed company operates (that is if we avoid mathematical computation on portfolio theory).
However, choosing negatively correlated assets is not all that the investor can do in managing his/her investments in a portfolio. Three main areas that MUST be clear in this portfolio management processes are: Planning, Execution and Feedback. Of the three planning is critical with a sound investment policy.
Required:
Make a detailed investment policy for any Business or investment club of your choice by taking some of the above points into consideration.