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3.1 WBS Commodities Corp. WBS Commodities Corp. specialises in providing investments for its clients. In particular, the strengths and expertise of the company is in
3.1 WBS Commodities Corp. WBS Commodities Corp. specialises in providing investments for its clients. In particular, the strengths and expertise of the company is in the area of commodity investment. The company has a fund pool of $10M to take onboard one large new client. You, representing the firm, are required to provide investment advice to this new client and invest on his behalf. You advise that the client focuses between 4-8 financial assets in commodities with some mixes between precious metals, livestock, and oil. Use the Bloomberg terminal (or other comparable databases) to select and gather data for these assets. The following conditions apply: 1. You advise your client to invest the $10M in these assets. You do not have to use all 8 assets in the pool; however, your pool should consist of a combination of various commodities (and demonstrate your analysis in these 8 assets even if you do not use all of them at the end). You should aim to use most, if not, all of the $10M in the investment pool. 2. You should describe the risk attitude of your clients (loving, neutral or averse). In any case, your clients intend to maximise returns for any level of a given risk. 3. As a commodity fund expert, you are allowed to have a long and a short positions in these assets. For example, if you employ both a long and a short positions, then it is possible for your long position to go over $10M for as long as the total long and short positions is $10M. 4. Your clients also require you to provide rationale for the assets chosen in the investment. For instance, if you decide to invest in oil, the rationale behind this decision (e.g. transparency, liquidity, growth, returns, etc.). You can also add Key Performance Indicators (KPIs) such as inflation rate, interest rate, relative performance, commodity price performance, etc.) to your analysis. 5. In terms of historical trade data, you should use and/or analyse minimum of 5 years' worth of data at a monthly frequency. Please include COVID-19 periods in your data selection and analysis. 3.2 Required WBS Commodities Corp. department has asked you to write a report outlining your recommendation as to which assets your clients should invest in. When compiling this report, your clients expect to see tables outlining the respective relevant information for each of these assets as well as appendices demonstrating all relevant calculations. When preparing the report, you have been asked to address the following points: 1. Calculate the average return on the asset, the standard deviation of the asset's returns as well as a risk-adjusted retur measure for the asset. 2. When conducting your fundamentals analysis, that you use the top-down approach to justify your choice of markets and assets. 3. That you find and highlight the key findings of relevant research or literature (including newspapers articles, investor reports, etc.) on each of the asset classes and specific markets. 3.3 Structure of the Report The report should be structured as follows: 1. COVER PAGE, which should contain: (a) A relevant title for the report. (b) The word count for the report (excluding the title page, executive summary, table of contents, tables and figures, appendices, and references). 2. TABLE OF CONTENTS, which should contain: (a) A full list of sections (including executive summary, references, bibliographic materials, and any appendices). (b) The page number of which each section begins. 3. EXECUTIVE SUMMARY, which should: (a) Highlight the key points and findings of the report. (b) Be in the third person and use the present tense, e.g. "This report compares..." 4. INTRODUCTION, which should (a) Give a succinct explanation of the aims, scope and context of the report. (b) Include brief details and definitions for any information necessary for the reader to understand the report. 3.1 WBS Commodities Corp. WBS Commodities Corp. specialises in providing investments for its clients. In particular, the strengths and expertise of the company is in the area of commodity investment. The company has a fund pool of $10M to take onboard one large new client. You, representing the firm, are required to provide investment advice to this new client and invest on his behalf. You advise that the client focuses between 4-8 financial assets in commodities with some mixes between precious metals, livestock, and oil. Use the Bloomberg terminal (or other comparable databases) to select and gather data for these assets. The following conditions apply: 1. You advise your client to invest the $10M in these assets. You do not have to use all 8 assets in the pool; however, your pool should consist of a combination of various commodities (and demonstrate your analysis in these 8 assets even if you do not use all of them at the end). You should aim to use most, if not, all of the $10M in the investment pool. 2. You should describe the risk attitude of your clients (loving, neutral or averse). In any case, your clients intend to maximise returns for any level of a given risk. 3. As a commodity fund expert, you are allowed to have a long and a short positions in these assets. For example, if you employ both a long and a short positions, then it is possible for your long position to go over $10M for as long as the total long and short positions is $10M. 4. Your clients also require you to provide rationale for the assets chosen in the investment. For instance, if you decide to invest in oil, the rationale behind this decision (e.g. transparency, liquidity, growth, returns, etc.). You can also add Key Performance Indicators (KPIs) such as inflation rate, interest rate, relative performance, commodity price performance, etc.) to your analysis. 5. In terms of historical trade data, you should use and/or analyse minimum of 5 years' worth of data at a monthly frequency. Please include COVID-19 periods in your data selection and analysis. 3.2 Required WBS Commodities Corp. department has asked you to write a report outlining your recommendation as to which assets your clients should invest in. When compiling this report, your clients expect to see tables outlining the respective relevant information for each of these assets as well as appendices demonstrating all relevant calculations. When preparing the report, you have been asked to address the following points: 1. Calculate the average return on the asset, the standard deviation of the asset's returns as well as a risk-adjusted retur measure for the asset. 2. When conducting your fundamentals analysis, that you use the top-down approach to justify your choice of markets and assets. 3. That you find and highlight the key findings of relevant research or literature (including newspapers articles, investor reports, etc.) on each of the asset classes and specific markets. 3.3 Structure of the Report The report should be structured as follows: 1. COVER PAGE, which should contain: (a) A relevant title for the report. (b) The word count for the report (excluding the title page, executive summary, table of contents, tables and figures, appendices, and references). 2. TABLE OF CONTENTS, which should contain: (a) A full list of sections (including executive summary, references, bibliographic materials, and any appendices). (b) The page number of which each section begins. 3. EXECUTIVE SUMMARY, which should: (a) Highlight the key points and findings of the report. (b) Be in the third person and use the present tense, e.g. "This report compares..." 4. INTRODUCTION, which should (a) Give a succinct explanation of the aims, scope and context of the report. (b) Include brief details and definitions for any information necessary for the reader to understand the report
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