Investment Portfolio

1. Identify the investment strategy or the objectives of the infrastructure fund for part (b).
These are usually available from the annual reports or prospectus of the fund.
2. (a) Justify your decision to your selection of fund for part (c), ETFs & ETCs, above. Why have
you decided to select this particular fund over the others?
(b) Identify some potential factors that might influence their performance over the next 12
months.
Note:
 Identify the strategy or the objective of the fund, do not discuss about who they are. Write
about the fund’s investment objectives or the type of assets that meet their requirements. That
is, if you are a potential investor how do you know if the fund you are (will) invest in, is meeting
its investment objective?
 There are thousand and one events happening in the market every day and financial markets
are closely integrated. The factors you have selected must have direct impact to the fund of
your choice. Otherwise one could relate the Tornado in Texas is set off by the flap of
Butterfly’s wings in Brazil.
Question (ii) (20%, 300 words)
3. Download their monthly closing or average prices for the last 2 years (from FinAnalysis or
Yahoo! Finance).
(a) Calculate the performance (return) of your portfolio and compare it against the return of the
benchmark ASX S&P200 index, that is:
(1) Calculate excess return and the tracking error of your portfolio.
(2) Discuss your observation from part (1).
(b) How much is your investment portfolio is influenced by
(1) Return and volatility of the Australian market? Is there a lag effect?
1 http://www.asx.com.au/products/managed-funds-product-list.htm
F I N 3 0 0 1 6 A s s i g n m e n t 2 2 0 1 4 Page 3
(2) Fluctuation at the European equity markets?
Note:
 You can select which ever method of tracking error covered in Chapter 20 of the textbook.
 When you are trying to answer, if your portfolio is influenced by XYZ factor, you could use
either regression analysis or correlation. Your answer to Q3 part (a) should not be just “yes”,
“no” or “I think”. Provide some justifications in terms of “how strong/weak” the relationship is.
That is your conclusion has to be justified by a quantitative answer. Actual investment is not
just about gut feeling.
Part Two (total of 15 marks, maximum 700 words)
“…stock exchanges [are] helping companies raise funds while at the same time providing an
investment avenue for those with savings. Side by side with stock exchanges are the world‘s stock
markets. It is the stock market which allows investors to change their investment decisions.
Whereas the stock exchange provides rules .and regulations and administrates the stock market “
Bennetts, R.J.(2004)
You are required to
1) explain the role and size of the share market of Indonesia2, including how it has developed,
its growth over the last decade, and how it is regulated.
2) Compare or contrast the difference between the Australian equity market (or an equity
market of your choice from the Asia Pacific region) and the Indonesian market.

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