Question

Question 2 “The asset allocation decision is not an isolated choice; rather, it is a component...

Question 2

  1. “The asset allocation decision is not an isolated choice; rather, it is a component of a portfolio management process.” Discourse the process.
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

After the planning stage in the portfolio management the next step is asset allocation. Asset allocation is a allocation of investment fund to asset classes. These assets class are debt, equity, commodity etc. These are major asset class that are mainly responsible for generating return for the portfolio. The process of allocation of fund depends upon the strategy followed by the portfolio manager. These can either strategic or either tactical. The return of the assest class is compared with some benchmark. The motto of the portfolio is to beat the return of the benchmark. Thus it forms a major part of the portfolio process and it's not a isolated process.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The reasons for creating a Strategic Asset Allocation for retail investors based on allocating risk rather...
The reasons for creating a Strategic Asset Allocation for retail investors based on allocating risk rather than on allocating returns include all of the following, except: A) Retail investors better understand their desired level of volatility rather than their desired required returns. B) Risk Parity based SAA are better diversified than equal $ allocated SAA. C) Creating an SAA based on optimising returns against risk may not allocate to investments that are important in a portfolio E) Historical returns of...
Chapter 4: Why is asset allocation important? Traditional or Roth IRA? Why or why not? With...
Chapter 4: Why is asset allocation important? Traditional or Roth IRA? Why or why not? With the indexes and passive management outperforming active management, argue for and against active management. Chapter 5: Identify the sources of risk. Explain beta and why is it important. What makes a portfolio efficient?
Go Global Investment Management has an asset allocation strategy of 70% U.S. investments and 30% global...
Go Global Investment Management has an asset allocation strategy of 70% U.S. investments and 30% global investments. Within the United States, Go Global has allocated 65% of its portfolio to equities and 35% to bonds. Go Global now holds 4% of its U.S. equity portfolio in the stock of Wally World. Internationally, Go Global has allocated 62% to equities and 38% to bonds. About what percentage of Go Global's total portfolio is invested in Wally World? Multiple Choice 1% 1.5%...
What would be the capital allocation between the risk free asset and the optimal risky investment...
What would be the capital allocation between the risk free asset and the optimal risky investment portfolio for an individual with risk aversion coefficient of 3 ? If the initial investment is $100,000, how much money should the investor allocate to each of the 5 assets (risk free asset and 4 risky assets). RF RATE 2% YEARLY Expected Avarage Return optimal investment portfolio in the risky global minimum variance portfolio. Weight Weight PG 0.010848 PG 0.2053 PG 0.336 Microsoft 0.014854...
Question-2 An investment advisor has recommended a $100,000 portfolio containing four assets: (1) Asset B, (2)...
Question-2 An investment advisor has recommended a $100,000 portfolio containing four assets: (1) Asset B, (2) Asset D, (3) a risk-free asset, and (4) a market portfolio. $20,000 will be invested in Asset B, with a beta of 1.5; $25,000 will be invested in Asset D, with a beta of 2.0; $25,000 will be invested in the risk-free asset, and $30,000 will be invested in the market portfolio. What is the beta of the Portfolio? YOU MUST SHOW YOUR WORK....
5. Variance Covariance Matrix and Asset Allocation Model (Markowitz Portfolio Model): Suppose the variance covariance matrix...
5. Variance Covariance Matrix and Asset Allocation Model (Markowitz Portfolio Model): Suppose the variance covariance matrix for two stocks is given as: Stock 1 Stock 2 Stock 1 0.025 0.015 Stock 2 0.030 The expected rate of returns on Stocks 1 and 2 are 10% and 12%, respectively. The average return to risk-free treasury is 5%. Given that the objective of the investor is a minimum-risk portfolio, find the optimum weights of each stock in the portfolio.
Which one of the following is not a disadvantage of buying rather than making a component...
Which one of the following is not a disadvantage of buying rather than making a component of a company's product? Question 2 options: Quality control specifications may not be met. The outside supplier could increase prices significantly in the future. Profitable product lines may be dropped. The supplier may not deliver on time
Question 2 (a) Project success depends on the management of a wide array of individuals and...
Question 2 (a) Project success depends on the management of a wide array of individuals and groups. Describe a process to manage this wide array of stakeholders, highlighting the challenges that can arise during this process.                                                                                                         (b) One of the challenges in project management is to identify the appropriate organisational structure in which to manage the project. Briefly outline the different types of organisational structures that exist in which projects can be managed.                              Identify the key criteria that will influence...
2. JP Morgan Asset Management, last year created a well-diversified portfolio of 45 stocks. It had...
2. JP Morgan Asset Management, last year created a well-diversified portfolio of 45 stocks. It had a rate of return of 15% and 6.25%variance. The T-bills rates were 4.5% in the US. Calculate the Sharpe ratio of this portfolio and comment on your answer.
Question: 1 "Normal costing" involves: a) Using budgeted cost allocation rates for direct costs and actual...
Question: 1 "Normal costing" involves: a) Using budgeted cost allocation rates for direct costs and actual costs for indirect costs. b) Using budgeted cost pools for both direct and indirect costs. c) Using budgeted cost allocation rates for indirect costs and actual costs direct costs. d) using budgeted cost allocation rates for both direct and indirect costs. Question: 2 Costs that are " similar in nature" and/or " driven by the same factor" are accumulated in a: a) spreadsheet b)...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT