Question 1 Discuss how Kates circumstances will affect her allocation to each asset class and rate each
Question:
Question 1
Discuss how Kate’s circumstances will affect her allocation to each asset class and rate each allocation as low, medium, or high and, hence, recommend a portfolio that is most suitable for her. No calculations are required.
Question 2
Specify at most five (5) violations of the CFA Institute Code of Ethics and Standards of Professional Conduct. State clearly who violated the Code and Standards, which specific Standard or part of the Standard has been violated, and present evidence from the case to support your answer. Each non-violation that has been incorrectly identified as a violation will be penalised, as will any violations in excess of five, including correct ones.
Jane recently passed her CFA Level II exam and joined Overseas United Bank (OUB) as a wealth manager. On her first day at work, she meets with her supervisor, Jacky, CFA, who introduces Jane to his team of wealth managers, who are responsible for a combined $1 billion in assets. Most of the accounts the team services are advisory in nature, although the team also manages some monies on a discretionary basis. Before Jane joined OUB, she had already heard about its notoriously bad legacy information systems. Things got so bad that when OUB's equity research analysts make a revision to their recommendations, it takes a day before the updated reports are published on their system for customer access. So as to prevent its discretionary customers from being disadvantaged relative to those of competitors, Jacky instructed his team to check with the equity research team twice a day to check for updates, and to communicate updates immediately to the customers of their discretionary accounts. Jacky advises Jane to do this as well, and she complies. A week in, Jacky asks Jane to meet with Kate, a prospective client, on an urgent basis as Kate will only be in town for a short time and will be flying off the next day. Since this is Jane's first potential client, she is eager to onboard the client. So she hurriedly schedules a first meeting with Kate for the next morning and quickly puts together six "stock" portfolios. At their first meeting, Jane plans to recommend one of these portfolios to Kate. At the meeting, Jane notes that Kate is a 40-year-old property agent living in the United States, with investable assets of USD20 million. Of this amount, Kate needs about $2 million three months from now in order to make a housing downpayment. She is not a big spender but hopes to fund at least part of her annual expenses, which are highly predictable, from her investment portfolio for the next twenty years. She is concerned, however, about the general increase in the prices of goods and services over time. Furthermore, Kate would like a portfolio that can be liquidated quickly and at fair value. She strongly supports American businesses and would like her investments to primarily contribute to the overall growth of the US economy. Jane recently passed her CFA Level II exam and joined Overseas United Bank (OUB) as a wealth manager. On her first day at work, she meets with her supervisor, Jacky, CFA, who introduces Jane to his team of wealth managers, who are responsible for a combined $1 billion in assets. Most of the accounts the team services are advisory in nature, although the team also manages some monies on a discretionary basis. Before Jane joined OUB, she had already heard about its notoriously bad legacy information systems. Things got so bad that when OUB's equity research analysts make a revision to their recommendations, it takes a day before the updated reports are published on their system for customer access. So as to prevent its discretionary customers from being disadvantaged relative to those of competitors, Jacky instructed his team to check with the equity research team twice a day to check for updates, and to communicate updates immediately to the customers of their discretionary accounts. Jacky advises Jane to do this as well, and she complies. A week in, Jacky asks Jane to meet with Kate, a prospective client, on an urgent basis as Kate will only be in town for a short time and will be flying off the next day. Since this is Jane's first potential client, she is eager to onboard the client. So she hurriedly schedules a first meeting with Kate for the next morning and quickly puts together six "stock" portfolios. At their first meeting, Jane plans to recommend one of these portfolios to Kate. At the meeting, Jane notes that Kate is a 40-year-old property agent living in the United States, with investable assets of USD20 million. Of this amount, Kate needs about $2 million three months from now in order to make a housing downpayment. She is not a big spender but hopes to fund at least part of her annual expenses, which are highly predictable, from her investment portfolio for the next twenty years. She is concerned, however, about the general increase in the prices of goods and services over time. Furthermore, Kate would like a portfolio that can be liquidated quickly and at fair value. She strongly supports American businesses and would like her investments to primarily contribute to the overall growth of the US economy.
Expert Answer:
Answer Explanation Following is the ranking for various assets for Kates portfolio I Rank 1 US Intermediate term bonds As the risk is lower term is le... View the full answer
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
Students also viewed these accounting questions
-
Based on the data presented in Exercise 1-16, identify those items that would appear on the income statement. Discuss.
-
Based on the data presented in Exercise 1-10, identify those items that would appear on the income statement.
-
Based on the data presented in Exercise 1-17, identify those items that would appear on the income statement.
-
Wilson Publishing Company produces books for the retail market. Demand for a current book is expected to occur at a constant annual rate of 7200 copies. The cost of one copy of the book is $14.50....
-
Consider the principles, assumptions and constraints of Generally Accepted Accounting Principles (GAAP). Define the revenue recognition principle and explain why it is important to users of financial...
-
A company maintains its non-current assets at cost. Accumulated provision for depreciation accounts are kept for each asset. At 31 December 2011 the position was as follows: The following...
-
Use the data in Exercise 20 in Section 13.1 for the following. a. Compute a point estimate of the mean height of sons whose fathers are 70 inches tall. b. Construct a 95% confidence interval for the...
-
Net present value , Internal Rate of Return, Sensitivity Analysis. Francesca Freed wants a Burg-N- Fry franchise. The buy-in is $500,000. Burg-N-Fry headquarters tells Francesca that typical annual...
-
3-A Novak Djokovic wants to start a tennis academy in India and is looking for funding options. He finds that the interest rates in India are around 12% per annum. Lenders in his parent country,...
-
Mike Curtains, a Registered Tax Agent, attends to the tax affairs of Frodo West. In preparing Frodo's 2021/22 income tax return, the following occurred: Frodo attended a meeting with Mike in August...
-
https://www.youtube.com/watch?v=tblmslbnnFc Develop a checklist of the 6 you should not do
-
A skydiver is falling straight down, along the negative y direction. ( a ) During the initial part ( part a of the figure ) of the fall, her speed increases from 1 5 . 0 m / s to 2 7 . 0 m / s in 1 ....
-
The hiker begins her trip away from her car by first walking 3 2 km south. She stops and sets up her tent for the night on the second day she walks 2 5 KM in a direction that makes an angle of 2 9 \...
-
Cranshaw Business Services (CBS) operates an information technology (IT) consulting firm out of two offices: Detroit and Los Angeles. Corporate services, such as legal, finance, and personnel, are...
-
Find the cutting force on a shaft that has a length of 750mm,a ofmeter of 50mm,The viscosity inside the shaft is 0, 1Pa-s and rotates with a speed of 700 rpm,a distance between spaces= 5 mm
-
Now to play with what we did on Thursday. A 1 0 kg mass moving at 3 0 m / s to the collides with a 1 0 0 kg mass moving at 4 0 m / s . The two object stick together after the collision. ( a ) What is...
-
(a) Consider double sideband suppressed carrier (DSB-SC) amplitude modulation, where the message signal is m(t) = cos(10t) + 2 sin (8t + 7), and the carrier signal is ve(t) = 20 cos(8000). (i) Find...
-
If you want to solve a minimization problem by applying the geometric method to the dual problem, how many variables and problem constraints must be in the original problem?
-
Based on the data in Exercise 10-12, determine the depreciation for the Kubota tractor for each of the first two years, using the sum-of-the-years-digits depreciation method. Round to the nearest...
-
The following accounts and their balances were selected from the unadjusted trial balance of REO Inc., a freight forwarder, at October 31, the end of the current fiscal year: Preferred 2% Stock, $100...
-
What types of transactions give rise to accounts receivable?
-
The post-closing trial balance for Cortez Co. is as follows. The subsidiary ledgers contain the following information: (1) accounts receivable J. Anders \($2,500,\) E Cone \($7,500,\) T. Dudley...
-
Presented below are the purchases and cash oe journals for Reyes Co. for its first month of operations. In addition, the following transactions have not been journalized for July. The cost of all...
-
Presented below are the sales and cash receipts journals for Wyrick Co. for its first month of operations. In addition, the following transactions have not been journalized for February 2008....
Study smarter with the SolutionInn App