Robert Devlin and Neil Parish are portfolio managers at the Broward Investment Group. At their regular Monday

Question:

Robert Devlin and Neil Parish are managers at the Broward Investment Group.
At their regular Monday strategy meeting, the topic of adding international bonds to one of their portfolios came up. The an ERISA-qualified pension account for a U.S. client was currently 90 percent invested in U.S. Treasury bonds and 10 percent invested in 10-year Canadian government bonds.
Devlin suggested buying a position in 10-year German government bonds, while Parish argued for a position in 10-year Australian government bonds.
a. Briefly discuss the three major issues that Devlin and Parish should address in their analyses of the return prospects for German and Australian bonds relative to those of U.S. bonds.
Having made no changes to the original Devlin and Parish hold a subsequent strategy meeting and decide to add positions in the government bonds of Japan, the United Kingdom, France, Germany, and Australia.
b. Identify and discuss two reasons for adding a broader mix of international bonds to the pension Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...