Question
As a financial planner, you have been given a task to advise your client, Mrs Naidoo, on a portfolio combination she can invest in. Mrs
As a financial planner, you have been given a task to advise your client, Mrs Naidoo, on a portfolio combination she can invest in. Mrs Naidoo wants to invest R1.2 million in a portfolio comprising of shares whose returns for the past five years are presented in the table below.
| YEAR | ZINK | TEND | ALPHA | BONA |
| 2015 | 7.69% | 12.5% | 14.79% | 2.82% |
| 2016 | 10.83% | 6.8% | 3.26% | -6% |
| 2017 | 3.42% | -7.75% | -28.57% | 13.64% |
| 2018 | -1.92% | 10.83% | 22.62% | 2.98% |
| 2019 | 9.33% | 7.88% | 9.02% | 6.18% |
Mrs Naidoo has identified the following three allocations of her R1.2 million in three different portfolios and has approached you for advice in selecting the best allocation of her investment.
| PORTFOLIO | ZINK | TEND | ALPHA | BONA |
| PORTFOLIO A | 480 000 | 300 000 | 180 000 | 240 000 |
| PORTFOLIO B | 540 000 | 0 | 0 | 660 000 |
| PORTFOLIO C | 0 | 0 | 504 000 | 696 000 |
Evaluate the performance of each portfolio and advise Mrs Naidoo on the best portfolio combination she can consider for her investment. Show all your workings
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Project Finance in Theory and Practice
Authors: Stefano Gatti
2nd edition
978-9382291589, 123919460, 978-0124157538, 978-0123919465
