BBA325 – Portfolio Management – Mid-term Exam August 2020 – Group B – Mondays
Task: Essay
• Individual task
• The students are required to perform: 4 Essay questions:
• Question 1: Many investors would like to invest part of their portfolios in real estate, but obviously cannot on their own purchase office buildings or strip
malls. Explain how this situation creates a profit incentive for investment firms that can sponsor REITs (real estate investment trusts).
• Question 2: One of the most significant developments in financial markets in recent years has been the growth of derivatives such as futures and
options. Please explain on how we can use this instruments in the building process of a portfolio (what are the advantages and disadvantages of these
type of instruments within a portfolio).
• Question 3: When managing a portfolio one has to consider various issues such as:
o Market liquidity
o Transaction costs
o Specific asset class liquidity
o Ability to buy the security on margin
o Ability to use short selling
o Fee structure impact on the portfolio performance
Explain how each of the above issues can influence the way you manage a portfolio (either equity or fixed income portfolios).
• Question 4: Please describe the various mutual funds available to investors and explain the main differences within the various types of mutual funds
and how are these fund sold in the market.
• You may refer to the Material discussed during the classes
• Student should submit the above question in a Word document on Turnitin.
Formalities:
• Wordcount: 2000 to 2500 words.
• Cover, Table of Contents, References and Appendix are excluded of the total Wordcount.
• Font: Arial 12,5 pts.
• Text alignment: Justified.
• The in-text References and the Bibliography have to be in Harvard’s citation style.
Submission: Week 4 – Via Moodle (Turnitin). August 23rd no latter than 23:00
Weight: This task is a 40% of your total grade for this subject.
• Outcome 1: Introduction and the Investment Environment
• Outcome 2: Mutual Funds and Other Investment Companies
• Outcome 3: Introduction to Risk Return and the Historical Record
• Outcome 4: Risk Aversion and Capital Allocation to Risky Assets