Portfolio Management Quiz 1

1 Match each step with the investment management implementation process it is a part of

Liability analysis	Define / review investment objectives	Formulate Investment strategy	Implementation and portfolio management	Monitoring/review
					Investment
					Tactical asset allocation
					Stock selection
					Asset allocation
					Analysis
					Select manager
					Risk/return
					Performance
					Short-term/long-term
					Benchmarks

2 Rationales for investing in certain asset types

current income	tax-effective income	income	stability	long-term stability	short-term stability	inflation hedge	long term inflation hedge	cash flow matching	liquidity	growth	superior long-term growth	diversification against domestic assets
													Cash
													Fixed interest
													Inflation-linked securities
													Infrastructure
													Property
													Shares
													Development capital
													International shares
													International fixed interest

3 Four of the common ways in which it is possible to examine the role of an assert component in a portfolio

At the most basic level, the objectives for a component part should not be inconsistent with the portfilion achieving the overall objectives.

- The different characteristics of the common asset classes mean that different asset classes can play different rules in meeting a client's liabilities.

The role of an asset component in a portfolio can be looked at from the angle of economic exposures.

Portfolio strucuture can be looked at from the angle of risk budgeting.

4 IMA=

5 ISFA=

and

6 The common ways to monitor investment managers are based on information about

1.

2.

3.

7 The four steps in the portfolio management process are:

1	2	3	4
				decide on an appropriate portfolio structure, ie. balanced or sector-specialist manager.
				undertake an analysis of the fund's liabilities
				establish an asset allocation for the fund
				establish investment objectives for the fund