Reference no: EM13381990

Question

Sam Short, CFA, has recently joined the investment management firm of Green, Spence and Smith (GSS). For several years, GSS has worked for a broad array of clients, including employee benefit plans, wealthy individuals and charitable organisations. Furthermore, the firm expresses expertise in managing stocks, bonds, cash reserves, real estate, venture capital and international securities. To date, the firm has not utilized a formal asset allocation process but instead has relied on the individual wishes of clients or the particular preferences of its portfolio managers. Short recommends to GSS management that a formal asset allocation process would be beneficial and emphasizes that a large part of a portfolio's ultimate return depends on asset allocation. He is asked to take his conviction an additional step forward by constructing a proposal to the executive management.

Requirement

As a portfolio manager, had to establish a diversified portfolio and choose an asset.

The following portfolio must be recommended to GSS.

Compare and contrast 2 companies - had to be from the same industry.

Choose an appropriate asset allocation method for the chosen companies based on their current allocation method performance? Etc, Bonds?

If they chose that method, why isit useful for them? What is the history of the industry in the asset allocation method?

If so, what are the factor causing them to underperformed / over performed?

Had to find the chosen company Return Rate, Standard Deviation and Covariance, ... the data had to be 3 years of daily returns to establish its performance.

Based on the earlier computed data, had to form an efficient frontier graph, and compute their CML Line Graph..compare them with the market.