Unit: Portfolio Construction

Due Date: Wed,10/31/18

Grading Type: Numeric

Points Possible: 150

Points Earned: 0

Deliverable Length: 1,200–1,500 words

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Assignment Details

Assignment Description

Key Assignment Draft

Part 1 Tasks

In general terms, discuss how the following should be taken into consideration when constructing an investment portfolio:

• Age
• Income
• Debt level and assets
• Marital status
• Parental status
• Risk tolerance
• Time horizon
• General economic conditions

Part 2 Tasks

Task 1

Discuss the efficient market hypotheses, and answer the following question:

• Does this hypothesis support active trading or buying a passive stock index fund?

Task 2

• Discuss several pieces of legislation that were enacted to protect against unethical investing practices.

Task 3

To illustrate your knowledge of portfolio construction, design a portfolio based on the following scenario:

• Robert and Susan Jenkins have inherited $200,000. They are aggressive investors with a joint annual income of $100,000, no debt, and an additional $500,000 in assets other than the $200,000 inheritance.

Design 2 separate $200,000 portfolios based on the following scenarios:

• The couple has 3 children between the ages of 9 and 17 years old, and they will use this money to pay for their college education.
• The couple will use the money to help fund retirement in 35 years.

When designing your portfolios, be sure to keep the following in mind:

• Each portfolio should contain at least 3 common stocks, 1 American Depositary Receipt (ADR) that you researched, and 3 bonds.
• Leaving a portion of the portfolio in cash is an option if you feel that is it appropriate.
• Charts and graphs should be used where appropriate.
• Portfolio models should be based on the Jenkins’ demographic profile and time horizon.

Be sure to include the following in your discussion:

• Reasons for your investment choices
• Stock and bond investment risk and return factors
• The security market line
• Beta and standard deviation
• Bond duration and interest rates

Please submit your assignment.

For assistance with your assignment, please use your text, Web resources, and all course materials.

Reading Assignment

http://careered.libguides.com/ctu/FINC320 Locate the tab with the same name as the unit.

Assignment Objectives

• Assess ethical issues in investing.
• Design a stock portfolio to minimize risk and maximize return.
• Examine international investment opportunities.
• Explain the Efficient Market Hypothesis.

Other Information

Instructor's Comments:

This submission should be in APA essay format containing specific recommendations, assumptions made and reasoning used. REMEMBER: the project is to be based on the scenario in the Unit 4 and 5 IP project description —- no class member’s submission will be identical because you might all make different assumptions in your decision making process while making recommendations! ALSO – students often forget to add a chart or graph visually illustrating the portfolios designed. SEE EXAMPLES of portfolio illustrations in the UNIT 4 learning material area.

The primary thing is to illustrate learning in each of subject areas AND you can use some creativity as it relates to your understanding of the scenario to ensure that you develop a robust plan for your clie